Exhibit 4.1


 


Execution Copy


 




 





INDENTURE,


 


Dated as of December 17, 2003,


 


AMONG


 


BLUE RIDGE PAPER PRODUCTS INC.,


 


as Issuer,


 


THE GUARANTORS NAMED HEREIN,


 


as Guarantors,


 


AND


 


U.S. BANK NATIONAL ASSOCIATION,


 


as Trustee and as Collateral Agent


 


91⁄2% Senior Secured Notes
due 2008




 





 

















 


CROSS-REFERENCE
TABLE


 


	
  TIA

  Section

  	
   

  	
  Indenture

  Section

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  7.10

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
  (b)

  	
   

  	
  7.03; 7.08;
  7.10

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.03; 7.11

  
	
   

  	
  (b)

  	
   

  	
  7.03; 7.11

  
	
   

  	
  (c)

  	
   

  	
  7.03

  
	
  312

  	
  (a)

  	
   

  	
  2.05

  
	
   

  	
  (b)

  	
   

  	
  7.07; 11.03

  
	
   

  	
  (c)

  	
   

  	
  11.03

  
	
  313

  	
  (a)

  	
   

  	
  7.06

  
	
   

  	
  (b)(1)

  	
   

  	
  7.06

  
	
   

  	
  (b)(2)

  	
   

  	
  7.06

  
	
   

  	
  (c)

  	
   

  	
  7.06

  
	
   

  	
  (d)

  	
   

  	
  7.06

  
	
  314

  	
  (a)

  	
   

  	
  4.06; 4.08

  
	
   

  	
  (b)

  	
   

  	
  12.03

  
	
   

  	
  (c)(1)

  	
   

  	
  4.06; 11.04

  
	
   

  	
  (c)(2)

  	
   

  	
  11.04

  
	
   

  	
  (c)(3)

  	
   

  	
  4.06

  
	
   

  	
  (d)

  	
   

  	
  12.04

  
	
   

  	
  (e)

  	
   

  	
  11.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.01(b)

  
	
   

  	
  (b)

  	
   

  	
  7.05

  
	
   

  	
  (c)

  	
   

  	
  7.01(a)

  
	
   

  	
  (d)

  	
   

  	
  7.01(c)

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a)(last
  sentence)

  	
   

  	
  2.09

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07

  
	
   

  	
  (c)

  	
   

  	
  9.04

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  2.04

  
	
  318

  	
  (a)

  	
   

  	
  11.01

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  11.01

  



 












N.A. means Not Applicable


 


NOTE:            This
Cross-Reference Table shall not, for any purpose, be deemed to be a part of
this Indenture.


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE ONE

  	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.02.

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.03.

  	
  Rules
  of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  	
  THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Form and
  Dating

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.02.

  	
  Execution
  and Authentication; Aggregate Principal Amount

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.03.

  	
  Registrar and Paying Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.04.

  	
  Obligations of Paying Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.05.

  	
  Holder Lists

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.06.

  	
  Transfer
  and Exchange

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.07.

  	
  Replacement
  Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.08.

  	
  Outstanding
  Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.09.

  	
  Treasury
  Notes; When Notes Are Disregarded

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.10.

  	
  Temporary
  Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.11.

  	
  Cancellation

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.12.

  	
  CUSIP Numbers

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.13.

  	
  Deposit of
  Moneys

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.14.

  	
  Book-Entry
  Provisions for Global Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.15.

  	
  Special Transfer Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  	
  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Optional
  Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.02.

  	
  Selection of Notes to
  Be Redeemed

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.03.

  	
  Notice
  of Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.04.

  	
  Effect of Notice of
  Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.05.

  	
  Deposit of Redemption Price

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.06.

  	
  Notes
  Redeemed in Part

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Payment of
  Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.02.

  	
  Maintenance of Office
  or Agency

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.03.

  	
  Corporate
  Existence

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.04.

  	
  Payment of Taxes and
  Other Claims

  	
   

  
					



 


i

















 


	
  SECTION 4.05.

  	
  Maintenance of
  Properties and Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.06.

  	
  Compliance
  Certificate; Notice of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.07.

  	
  Compliance
  with Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.08.

  	
  Reports to
  Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.09.

  	
  Waiver of Stay,
  Extension or Usury Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.10.

  	
  Limitation on
  Restricted Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.11.

  	
  Limitation
  on Transactions with Affiliates

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.12.

  	
  Limitation
  on Incurrence of Additional Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.13.

  	
  Limitation
  on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.14.

  	
  Additional
  Subsidiary Guarantees and Collateral Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.15.

  	
  Limitation on Change of
  Control

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.16.

  	
  Limitation on Asset Sales

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.17.

  	
  Impairment of Security
  Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.18.

  	
  Limitation
  on Liens

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.19.

  	
  Conduct
  of Business

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.20.

  	
  Limitation
  on Issuances and Sales of Capital Stock of Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.21.

  	
  Real Estate
  Mortgages and Recordings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.22.

  	
  Leasehold Mortgages and
  Filings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.23.

  	
  Payments
  For Consent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  	
  SUCCESSOR
  CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Merger,
  Consolidation and Sale of Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.02.

  	
  Successor Corporation
  Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  	
  DEFAULT
  AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Events of
  Default

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.02.

  	
  Acceleration

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.03.

  	
  Other Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.04.

  	
  Waiver
  of Past Defaults

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.05.

  	
  Control
  by Majority

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.06.

  	
  Limitation
  on Suits

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.07.

  	
  Rights of Holders
  to Receive Payment

  	
   

  
				



 


ii

















 


	
  SECTION 6.08.

  	
  Collection
  Suit by Trustee or Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.09.

  	
  Trustee May File
  Proofs of Claim

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.10.

  	
  Priorities

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.11.

  	
  Undertaking
  for Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.12.

  	
  Restoration of
  Rights and Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  	
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Duties of
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.02.

  	
  Rights of
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.03.

  	
  Individual Rights of
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.04.

  	
  Trustee’s
  Disclaimer

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.05.

  	
  Notice of
  Default

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.06.

  	
  Reports by Trustee to
  Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.07.

  	
  Compensation and Indemnity

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.08.

  	
  Replacement
  of Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.09.

  	
  Successor Trustee by
  Merger, Etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.10.

  	
  Eligibility;
  Disqualification

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.11.

  	
  Preferential
  Collection of Claims Against Company

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.12.

  	
  Trustee as Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.13.

  	
  Co-Trustees,
  co-Collateral Agent and Separate Trustees, Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.14.

  	
  Form of
  Documents Delivered to Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  	
  SATISFACTION
  AND DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  Legal
  Defeasance and Covenant Defeasance

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.02.

  	
  Satisfaction and
  Discharge

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.03.

  	
  Survival of Certain
  Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.04.

  	
  Acknowledgment
  of Discharge by Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.05.

  	
  Application of Trust Moneys

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.06.

  	
  Repayment to
  the Company; Unclaimed Money

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.07.

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Without Consent of Holders

  	
   

  
				



 


iii

















 


	
  SECTION 9.02.

  	
  With
  Consent of Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.03.

  	
  Compliance
  with TIA

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.04.

  	
  Revocation and Effect
  of Consents

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.05.

  	
  Notation on or
  Exchange of Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.06.

  	
  Trustee to Sign Amendments,
  Etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.07.

  	
  Conformity with
  Trust Indenture Act

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  	
  GUARANTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  Guarantee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.02.

  	
  Release of a
  Guarantor

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.03.

  	
  Limitation of
  Guarantor’s Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.04.

  	
  [Reserved]

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.05.

  	
  Contribution

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.06.

  	
  Waiver
  of Subrogation

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.07.

  	
  Evidence
  of Guarantee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.08.

  	
  Waiver of Stay,
  Extension or Usury Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  Trust Indenture Act
  Controls

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.02.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.03.

  	
  Communications
  by Holders with Other Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.04.

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.05.

  	
  Statements
  Required in Certificate or Opinion

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.06.

  	
  Rules by
  Trustee, Paying Agent, Registrar

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.07.

  	
  Legal Holidays

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.08.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.09.

  	
  No
  Adverse Interpretation of Other Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.10.

  	
  No Recourse Against Others

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.11.

  	
  Successors

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.12.

  	
  Duplicate
  Originals

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.13.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.14.

  	
  Waiver
  of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWELVE

  	
  SECURITY

  	
   

  
					



 


iv

















 


	
  SECTION 12.01.

  	
  Grant of Security Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.02.

  	
  Intercreditor
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.03.

  	
  Recording
  and Opinions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.04.

  	
  Release
  of Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.05.

  	
  Specified Releases of
  Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.06.

  	
  Release
  upon Satisfaction or Defeasance of all Outstanding Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.07.

  	
  Form and Sufficiency of
  Release

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.08.

  	
  Purchaser
  Protected

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.09.

  	
  Authorization
  of Actions to Be Taken by the Collateral Agent Under the Collateral
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.10.

  	
  Authorization
  of Receipt of Funds by the Collateral Agent Under the Collateral Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Initial Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
  -

  	
  Form of Exchange Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
  -

  	
  Form of Legend for Global Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
  -

  	
  Form of Certificate to Be
  Delivered in Connection with Transfers to Non-QIB Accredited Investors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit E

  	
  -

  	
  Form of Certificate to Be Delivered in
  Connection with Transfers Pursuant to Regulation S

  	
   

  



 


NOTE:    This Table of Contents shall not, for any purpose, be deemed to
be part of this Indenture.


 


v

















 


INDENTURE, dated as of
December 17, 2003, among Blue Ridge Paper Products Inc., a Delaware
corporation (the “Company”), the Guarantors (as herein defined) and U.S. Bank National Association, as Trustee
(in such capacity, the “Trustee”) and as Collateral Agent (in such
capacity, the “Collateral Agent”).


 


WITNESSETH:


 


WHEREAS, the Company and the
Guarantors (with respect to the Guarantees) have duly authorized the creation
of the Notes and, to provide therefor, the Company and the Guarantors have duly
authorized the execution and delivery of this Indenture; and


 


WHEREAS, all things
necessary to make the Notes, when each is duly issued and executed by the
Company, and authenticated and delivered hereunder, the valid obligations of
the Company, and to make the Guarantees the valid obligations of the Guarantors
and to make this Indenture a valid and binding agreement of each of the Company
and the Guarantors, have been done.


 


NOW, THEREFORE, each party
hereto agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders:


 


ARTICLE ONE


 


DEFINITIONS
AND INCORPORATION BY REFERENCE


 


SECTION 1.01.  Definitions.


 


“Acceleration Notice” has the meaning set forth
in Section 6.02(a).


 


“Acquired Indebtedness” means Indebtedness of a
Person or any of its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary of the Company or at the time it merges or consolidates
with or into the Company or any of its Restricted Subsidiaries or assumed in
connection with the acquisition of assets from such Person and in each case not
incurred by such Person in connection with, or in anticipation or contemplation
of, such Person becoming a Restricted Subsidiary of the Company or such
acquisition, merger or consolidation and which Indebtedness is without recourse
to the Company or any of its Subsidiaries or to any of their respective
properties or assets other than the Person or the assets to which such
Indebtedness related prior to the time such Person became a Restricted Subsidiary
of the Company or the time of such acquisition, merger or consolidation.


 


“Additional Notes” means any 91⁄2% Senior Secured
Notes due 2008 issued after the Issue Date (other than pursuant to Sections
2.06, 2.07, 2.10 or 3.06 of this Indenture and other than Exchange Notes) from
time to time in accordance with the terms of this Indenture.


 


“Affiliate” means, with respect to any
specified Person, any other Person who directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, such specified Person. The term “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise; provided, that Beneficial Ownership of 10%
or more of the Voting Stock of the Person shall be deemed to be control. The
terms “controlling” and “controlled” have meanings correlative of
the foregoing.


 


“Agent” has the meaning set forth in the
definition of the term “Credit Agreement.”


 

















 


“Agent Members” has the meaning set forth in Section 2.14(a)
and means, with respect to the Depository, Euroclear or Clearstream, a Person
who has an account with the Depository, Euroclear or Clearstream, respectively
(and, with respect to the Depository, shall include Euroclear and Clearstream).


 


“Applicable Indebtedness” means: (1) in respect
of any asset that is the subject of an Asset Sale at a time when such asset is
included in the Collateral, Indebtedness that is pari passu with the Notes and secured at such time by
Collateral; or (2) in respect of any other asset, Indebtedness that is pari passu with the Notes.


 


“Applicable Procedures” means, with respect to
any transfer or exchange of or for beneficial interests in any Global Note, the
rules and procedures of the Depository, Euroclear and Clearstream that apply to
such transfer or exchange.


 


“Asset Acquisition” means (1) an Investment by
the Company or any Restricted Subsidiary of the Company in any other Person
pursuant to which such Person shall become a Restricted Subsidiary of the
Company or any Restricted Subsidiary of the Company, or shall be merged with or
into the Company or any Restricted Subsidiary of the Company, or (2) the
acquisition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person (other than a Restricted Subsidiary of the Company) that
constitute all or substantially all of the assets of such Person or comprise
any division or line of business of such Person or any other properties or
assets of such Person other than in the ordinary course of business.


 


“Asset Sale” means any direct or indirect sale,
issuance, conveyance, transfer, lease (other than operating leases entered into
in the ordinary course of business), assignment or other transfer (other than a
Lien in accordance with this Indenture) for value by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or a Guarantor of:


 


(1) any Capital Stock
of any Restricted Subsidiary of the Company; or


 


(2) any other
property or assets of the Company or any Restricted Subsidiary of the Company
other than in the ordinary course of business;


 


provided, however, that Asset Sales shall
not include:


 


(a) a transaction or series of related
transactions for which the Company or its Restricted Subsidiaries receive
aggregate consideration of less than $1.0 million;


 


(b) the sale, lease, conveyance, disposition or
other transfer of all or substantially all of the assets (determined on a
consolidated basis) of the Company as permitted under Section 5.01;


 


(c) any Restricted Payment permitted by Section 4.10,
including a Permitted Investment;


 


(d) the sale of Cash Equivalents;


 


(e) the sale or other disposition of used, worn
out, obsolete or surplus equipment; and


 


(f) the sale or other disposition of surplus,
aged or unassigned inventory.


 


“Authenticating Agent” has the meaning set
forth in Section 2.02.


 


2

















 


“Bankruptcy Code” means the Bankruptcy Reform
Act of 1978, as amended, and codified as 11 U.S.C. §§101 et seq.


 


“Beneficial Owner” has the meaning assigned to
such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in
calculating the beneficial ownership of any particular “person” (as that term
is used in Section 13(d)(3) of the Exchange Act), such “person” will be
deemed to have beneficial ownership of all securities that such “person” has
the right to acquire by conversion or exercise of other securities, whether
such right is currently exercisable or is exercisable only upon the occurrence
of a subsequent condition.  The terms
“Beneficially Owns” and “Beneficially Owned” have meanings correlative to the
foregoing.


 


“Board of Directors” means, as to any Person,
the board of directors (or similar governing body) of such Person or any duly
authorized committee thereof.


 


“Board Resolution” means, with respect to any
Person, a copy of a resolution certified by the Secretary or an Assistant
Secretary of such Person to have been duly adopted by the Board of Directors of
such Person and to be in full force and effect on the date of such
certification and delivered to the Trustee.


 


“Business Day” means a day that is not a Legal
Holiday.


 


“Capital Stock” means:


 


(1)                                  with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person;


 


(2)                                  with respect to any Person that is not a
corporation, any and all partnership, membership or other equity interests of
such Person; and


 


(3)                                  any warrants, rights or options to
purchase any of the instruments or interests referred to in clause (1) or (2)
above.


 


“Capitalized Lease Obligation” means, as to any
Person, the obligations of such Person under a lease that are required to be
classified and accounted for as capital lease obligations under GAAP and, for
purposes of this definition, the amount of such obligations at any date shall
be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.


 


“Cash Equivalents” means:


 


(1)                                  marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof;


 


(2)                                  marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one of
the two highest ratings obtainable from either Standard & Poor’s Ratings
Service, a division of The McGraw Hill Companies, Inc. (“S&P”) or Moody’s
Investors Service, Inc. (“Moody’s”);


 


3

















 


(3)                                  commercial paper maturing no more than
one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody’s;


 


(4)                                  certificates of deposit or bankers’
acceptances maturing within one year from the date of acquisition thereof
issued by any bank organized under the laws of the United States of America or
any state thereof or the District of Columbia or any U.S. branch of a foreign
bank having at the date of acquisition thereof combined net capital and surplus
of not less than $250.0 million;


 


(5)                                  repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clause
(1) above entered into with any bank meeting the qualifications specified in
clause (4) above; and


 


(6)                                  investments in money market funds which
invest substantially all their assets in securities of the types described in
clauses (1) through (5) above.


 


“Change of Control” means the occurrence of one
or more of the following events:


 


(1)                                  any direct or indirect sale, lease, transfer,
conveyance or other disposition (other than by way of merger or consolidation),
in one transaction or a series of related transactions, of all or substantially
all of the assets of the Company to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a “Group”), other than a transaction in which
the transferee is controlled by one or more Permitted Holders;


 


(2) the Company consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges with or into, the
Company, other than (A) a transaction in which the surviving or Transferee
Person is a Person that is controlled by the Permitted Holders or (B) any such
transaction where the Voting Stock of the Company outstanding immediately prior
to such transaction is converted into or exchanged for Voting Stock (other than
Disqualified Capital Stock) of the surviving or transferee Person constituting
a majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance) and one or
more Permitted Holders have the right to elect a majority of the Board of
Directors of such surviving or transferee Person;


 


(3) the approval by the holders of Capital Stock of
the Company of any plan or proposal for the liquidation or dissolution of the
Company;


 


(4) prior to the first Public Equity Offering, the
Permitted Holders cease for any reason to be the Beneficial Owner, directly or
indirectly, in the aggregate of at least a majority of the total voting power
of the Voting Stock of the Company (or, if the Voting Stock of the Company is
wholly owned by a parent holding company, the Voting Capital Stock of such
parent holding company), whether by virtue of the issuance, sale or other disposition
of Capital Stock of the Company (or such parent holding company) or a direct or
indirect holder of Capital Stock of the Company (or such parent holding
company), a merger, consolidation or sale of assets involving the Company, a
Restricted Subsidiary or a direct or indirect holder of Capital Stock of the
Company (or such parent holding company), any voting trust or other agreement,
and, in any case, one or more Permitted Holders do not have the right to elect
a majority of the Board of Directors of the Company


 


(5) subsequent to the first Public Equity Offering,
(a) any Person or Group (other than the ESOP) is or becomes the Beneficial
Owner, directly or indirectly, in the aggregate of more than 35% of the total
voting power of the Voting Stock of the Company (or, if the Voting Stock of the
Company is wholly owned by a parent holding company, the Voting Capital Stock
of such parent holding company),


 


4

















 


and (b) the Permitted
Holders Beneficially Own, directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the Company (or
such parent holding company) than such other Person or Group, and one or more
Permitted Holders do not have the right to elect a majority of the Board of
Directors of the Company (or such parent holding company); or


 


(6) individuals who on the Issue Date constituted the
Board of Directors (together with any new directors whose election by such
Board of Directors or whose nomination for election by the stockholders of the
Company was approved pursuant to a vote of a majority of the directors then
still in office who were either directors on the Issue Date or whose election
or nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office.


 


“Change of Control Offer” has the meaning set
forth in Section 4.15(a).


 


“Change of Control Payment Date” has the
meaning set forth in Section 4.15(b)(2).


 


“Clearstream” means Clearstream Banking, societe anonyme.


 


“Collateral” shall mean “Collateral” as such
term is defined in the Security Agreement, all property mortgaged under the
Mortgages and any other property, whether now owned or hereafter acquired, upon
which a Lien securing the Obligations is granted or purported to be granted
under any Collateral Agreement.


 


“Collateral Agent” means the party named as
such in this Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such successor.


 


“Collateral Agreements” means, collectively,
the Intercreditor Agreement, the Security Agreement and each Mortgage, in each
case, as the same may be in force from time to time.


 


“Commission” means the Securities and Exchange
Commission.


 


“Common Stock” of any Person means any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or non-voting) of such Person’s common stock,
whether outstanding on the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.


 


“Company” means the party named as such in this
Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.


 


“Consolidated EBITDA” means, with respect to
any Person, for any period, the sum (without duplication) of:


 


(1)                                  Consolidated Net Income; and


 


(2)                                  to the extent Consolidated Net Income has
been reduced thereby:


 


(a)                                  all income taxes of such Person and its
Restricted Subsidiaries paid or accrued in accordance with GAAP for such
period;


 


(b)                                 Consolidated Interest Expense and
interest expense attributable to write-offs of deferred financing costs; and


 


5

















 


(c)                                  Consolidated Non-cash Charges (including,
without limitation, ESOP expense) less any non-cash items increasing
Consolidated Net Income for such period,


 


all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in
accordance with GAAP.


 


“Consolidated Fixed Charge Coverage Ratio”
means, with respect to any Person, the ratio of Consolidated EBITDA of such
Person during the four consecutive full fiscal quarters (the “Four Quarter
Period”) most recently ending on or prior to the date of the transaction or
event giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the “Transaction
Date”) to Consolidated Fixed Charges of such Person for the Four Quarter
Period. In addition to and without limitation of the foregoing, for purposes of
this definition, “Consolidated EBITDA” and “Consolidated Fixed Charges” shall
be calculated after giving effect on a pro forma basis for the period of such
calculation to:


 


(1)                                  the incurrence or repayment of any
Indebtedness of such Person or any of its Restricted Subsidiaries (and the
application of the proceeds thereof) giving rise to the need to make such
calculation and any incurrence or repayment of other Indebtedness (and the
application of the proceeds thereof), other than the incurrence or repayment of
Indebtedness in the ordinary course of business for working capital purposes
pursuant to working capital facilities, occurring during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter Period and
on or prior to the Transaction Date, as if such incurrence or repayment, as the
case may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period; and


 


(2)                                  any Asset Sale or other disposition or
Asset Acquisition (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of such Person or one of
its Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of any such Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness) during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter Period and
on or prior to the Transaction Date, as if such Asset Sale or other disposition
or Asset Acquisition (including the incurrence, assumption or liability for any
such Indebtedness or Acquired Indebtedness and also including any Consolidated
EBITDA associated with such Asset Sale or other disposition or Asset
Acquisition) occurred on the first day of the Four Quarter Period; provided that the Consolidated EBITDA of
any Person acquired shall be included only to the extent includible pursuant to
the definition of “Consolidated Net Income.” If such Person or any of its
Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the preceding sentence shall give effect to the incurrence of
such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of
such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness.


 


Furthermore, in calculating “Consolidated Fixed
Charges” for purposes of determining the denominator (but not the numerator) of
this “Consolidated Fixed Charge Coverage Ratio”


 


(a)                                  interest on outstanding Indebtedness
determined on a fluctuating basis as of the Transaction Date (including
Indebtedness actually incurred on the Transaction Date) and which will continue
to be so determined thereafter shall be deemed to have accrued at a fixed rate
per annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date; and


 


(b)                                 notwithstanding clause (a) above,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to Interest Swap


 


6

















 


Obligations, shall be
deemed to accrue at the rate per annum resulting after giving effect to the
operation of such agreements.


 


“Consolidated Fixed Charges” means, with
respect to any Person for any period, the sum, without duplication, of:


 


(1)                                  Consolidated Interest Expense; plus


 


(2)                                  the product of (x) the amount of all
dividend payments on any series of Preferred Stock of such Person (other than
dividends paid in Qualified Capital Stock) paid, accrued or scheduled to be
paid or accrued during such period times (y)
a fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated federal, state and local tax rate
of such Person, expressed as a decimal.


 


“Consolidated Interest Expense” means, with
respect to any Person for any period, the aggregate of the interest expense
(excluding writeoff of deferred financing costs) of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, as determined
in accordance with GAAP, and including, without duplication, (a) all
amortization or accretion of original issue discount; (b) the interest
component of Capitalized Lease Obligations paid, accrued and/or scheduled to be
paid or accrued by such Person and its Restricted Subsidiaries during such
period; and (c) net cash costs under all Interest Swap Obligations (including
amortization of fees); provided, however,
that Consolidated Interest Expense of the Company shall not include any
interest expense attributable to Indebtedness of Holdings included in the
Company’s consolidated balance sheet to the extent that such Indebtedness does
not constitute Indebtedness of the Company and its Restricted Subsidiaries.


 


“Consolidated Leverage Ratio” means, with respect to any Person, as of
any date of determination, the ratio of (a) the aggregate principal amount of
Indebtedness of such Person and its Restricted Subsidiaries on a consolidated
basis outstanding as of the most recent balance sheet for which financial
statements are available, determined on a consolidated basis in accordance with
GAAP (“Total Debt”), to (b) Consolidated EBITDA of such Person during the four
consecutive full fiscal quarters ending on the date of such balance sheet (the
“Four Quarter Period”); provided, however,
that Total Debt of the Company shall not include any Indebtedness of Holdings
included in the Company’s consolidated balance sheet to the extent that such
Indebtedness does not constitute Indebtedness of the Company and its Restricted
Subsidiaries.


 


In addition to and
without limitation of the foregoing, for purposes of this definition only,
“Consolidated EBITDA” and “Total Debt” shall be calculated after giving effect
on a pro forma basis for the period of such calculation to:


 


(1) the incurrence or
repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the
proceeds thereof), occurred on the first day of the Four Quarter Period; and


 


(2) any Asset Sale or
other disposition or Asset Acquisition (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of


 


7

















 


such Person or one of its
Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of any such Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness during the Four Quarter Period
or at any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date), as if such Asset Sale or other disposition or
Asset Acquisition (including the incurrence, assumption or liability for any
such Indebtedness or Acquired Indebtedness and also including any Consolidated
EBITDA associated with such Asset Acquisition) occurred on the first day of the
Four Quarter Period provided that the Consolidated EBITDA of any Person
acquired shall be included only to the extent includible pursuant to the
definition of “Consolidated Net Income.” If such Person or any of its
Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the preceding sentence shall give effect to the incurrence of
such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of
such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness.


 


Furthermore, in
calculating “Consolidated Leverage Ratio,” Consolidated EBITDA for such Four
Quarter Period shall be increased by (i) the amount of any items that are
included in the definition of “Adjusted EBITDA” set forth in the Offering
Circular to the extent Consolidated EBITDA has been reduced thereby, (ii) the
effects of any temporary plant shutdowns for inspection and repair of
facilities and (iii) the net savings from permanent plant shutdowns.


 


“Consolidated Net Income” means, with respect
to any Person, for any period, the aggregate net income (or loss) of such
Person and its Restricted Subsidiaries for such period on a consolidated basis,
determined in accordance with GAAP; provided, however, that there
shall be excluded therefrom, without duplication:


 


(1)                                  after-tax gains and losses from Asset
Sales or abandonments or reserves relating thereto;


 


(2)                                  after-tax items classified as
extraordinary gains or losses;


 


(3)                                  the net income (but not loss) of any
Restricted Subsidiary of the referent Person to the extent that the declaration
of dividends or similar distributions by that Restricted Subsidiary of that
income is restricted by a contract, operation of law or otherwise;


 


(4)                                  the net income of any Person, other than
the referent Person or a Restricted Subsidiary of the referent Person, except
to the extent of cash dividends or distributions paid to the referent Person or
to a wholly-owned Restricted Subsidiary of the referent Person by such Person;


 


(5)                                  any restoration to income of any material
contingency reserve, except to the extent that provision for such reserve was
made out of Consolidated Net Income accrued at any time following the Issue
Date;


 


(6)                                  income or loss attributable to
discontinued operations (including, without limitation, operations disposed of
during such period whether or not such operations were classified as
discontinued);


 


(7) all gains and losses realized on or because of the
purchase or other acquisition by such Person or any of its Restricted
Subsidiaries of any securities of such Person or any of its Restricted Subsidiaries;


 


(8) the cumulative effect of a change in accounting
principles;


 


8

















 


(9) interest expense attributable to dividends on
Qualified Capital Stock pursuant to Statement of Financial Accounting Standards
No. 150, “Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity”;


 


(10) interest expense attributable to Indebtedness of
Holdings included in the Company’s consolidated balance sheet to the extent
that such Indebtedness does not constitute Indebtedness of the Company and its
Restricted Subsidiaries and non-cash charges attributable to obligations of
Holdings to the extent that such obligations are non-recourse to the Company
and its Restricted Subsidiaries (but excluding ESOP expenses);


 


(11) non-cash charges resulting from the impairment of
intangible assets; and


 


(12) in the case of a successor to the referent Person
by consolidation or merger or as a transferee of the referent Person’s assets,
any earnings of the successor corporation prior to such consolidation, merger
or transfer of assets.


 


“Consolidated Non-cash Charges” “ means, with
respect to any Person, for any period, the aggregate depreciation, amortization
and other non-cash items and expenses of such Person and its Restricted
Subsidiaries to the extent they reduce Consolidated Net Income of such Person
and its Restricted Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP (excluding any such charges constituting an
extraordinary item or loss or any such charge which requires an accrual of or a
reserve for cash charges for any future period).


 


“Corporate Trust Office” means the office of
the Trustee at which the corporate trust business of the Trustee shall, at any
particular time, be principally administered, which office is, at the date of
this Indenture, located at 60 Livingston Avenue, St. Paul, MN  55107-2292.


 


“Covenant Defeasance” has the meaning set forth
in Section 8.01(c).


 


“Credit Agreement” means the Credit Agreement
dated as of the Issue Date, between the Company, the other Credit Parties party
thereto, the lenders party thereto (together with their successors and assigns,
the “Lenders”) and General
Electric Capital Corporation, as agent (in such capacity, together with its
successors and assigns, the “Agent”),
setting forth the terms and conditions of the senior credit facility, together
with the related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case as such agreements
may be amended, restated, supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted under clause
(2) or (14) of the definition of the term “Permitted Indebtedness”) or adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.


 


“Currency Agreement” means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any Restricted Subsidiary of the Company
against fluctuations in currency values.


 


“Custodian” means any receiver, trustee,
assignee, liquidator, sequestrator or similar official under any Bankruptcy
Code.


 


9

















 


“Default” means an event or condition the
occurrence of which is, or with the lapse of time or the giving of notice or
both would be, an Event of Default.


 


“Depository” means The Depository Trust
Company, its nominees and successors (“DTC”).


 


“Disqualified Capital Stock” means that portion
of any Capital Stock which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option of the
holder thereof), or upon the happening of any event (other than an event that
would constitute a Change of Control), matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
sole option of the holder thereof (except in each case, upon the occurrence of
a Change of Control) on or prior to the 91st day after the final maturity date
of the Notes for cash or is convertible into or exchangeable for debt
securities of the Company or its Subsidiaries at any time prior to such date.


 


“Domestic Restricted Subsidiary” means, with
respect to any Person, a Domestic Subsidiary of such Person that is a
Restricted Subsidiary of such Person.


 


“Domestic Subsidiary” means, with respect to
any Person, a Subsidiary of such Person that is not a Foreign Subsidiary of
such Person.


 


“Equity Offering” means an underwritten public
offering of Common Stock of the Company or any holding company of the Company
pursuant to a registration statement filed with the SEC (other than on Form
S-8) or any private placement of Common Stock of the Company or any holding
company of the Company to any Person other than issuances upon exercise of
options by employees of any holding company, the Company or any of the
Restricted Subsidiaries.


 


“ESOP” means the Blue Ridge Paper Products
Employee Stock Ownership Plan.


 


“ESOP Stock Repurchase” means, prior to a
Public Equity Offering, (1) any payments, contributions, loans, advances,
distributions or dividends to the ESOP which are used by the ESOP to purchase,
repurchase, redeem or acquire shares of common stock of Holdings or (2) any
purchases, repurchases, redemptions or acquisitions of shares of, or options to
purchase shares of, common stock of Holdings from current or former officers,
directors or employees of the Company or any of its Subsidiaries (or permitted
transferees of such current or former officers, directors or employees), in
each case pursuant to the terms of the ESOP as in effect on the Issue Date.


 


“Euroclear” means Euroclear Bank S.A./N.V., as
operator of the Euroclear system.


 


“Event of Default” has the meaning set forth in
Section 6.01.


 


“Exchange Act” means the Securities Exchange
Act of 1934, as amended, or any successor statute or statutes thereto.


 


“Exchange Notes” means the 91⁄2% Senior Secured
Notes due 2008 issued in exchange for the Initial Notes or Additional Notes
pursuant to the terms of a Registration Rights Agreement.


 


“Exchange Offer” means an exchange offer that
may be made by the Company, pursuant to the Registration Rights Agreement, to
exchange for any and all the Initial Notes or Additional Notes a like aggregate
principal amount of Exchange Notes having substantially identical terms to the
Initial Notes or Additional Notes registered under the Securities Act.


 


10

















 


“Fair Market Value” means, with respect to any
asset or property, the price which could be negotiated in an arm’s-length, free
market transaction, for cash, between a willing seller and a willing and able
buyer, neither of whom is under undue pressure or compulsion to complete the
transaction. Fair Market Value shall be determined by the Board of Directors of
the Company acting in good faith and shall be evidenced by a Board Resolution
of the Board of Directors of the Company delivered to the Trustee.


 


“Foreign Restricted Subsidiary” means any
Restricted Subsidiary that is organized under the laws of any jurisdiction
other than the United States of America, any state thereof or the District of
Columbia.


 


“Foreign Subsidiary” means, with respect to any
Person, any Subsidiary of such Person that is organized under the laws of any
jurisdiction other than the United States of America, any state thereof or the
District of Columbia.


 


“GAAP” means accounting principles generally
accepted in the United States set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, which are in effect on the Issue Date.


 


“Global Notes” has the meaning set forth in Section 2.01.


 


“Guarantee” has the meaning set forth in Section 10.01.


 


“Guarantor” means (1) each of the Company’s
Restricted Subsidiaries existing on the Issue Date and (2) each of the
Company’s Restricted Subsidiaries that in the future executes a supplemental
indenture in which such Restricted Subsidiary agrees to be bound by the terms
of the Indenture as a Guarantor; provided that
any Person constituting a Guarantor as described above shall cease to
constitute a Guarantor when its respective Guarantee is released in accordance
with the terms of the Indenture.


 


“Holder” and “Noteholder” mean the
Person in whose name a Note is registered on the Registrar’s books.


 


“Holdings” means Blue Ridge Holding Corp.


 


“incur” has the meaning set forth in Section 4.12.


 


“Indebtedness” means with respect to any
Person, without duplication:


 


(1) all Obligations of such Person for borrowed money;


 


(2) all Obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;


 


(3) all Capitalized Lease Obligations of such Person;


 


(4) all Obligations of such Person issued or assumed
as the deferred purchase price of property, all conditional sale obligations
and all Obligations under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary course
of business);


 


11

















 


(5) all Obligations for the reimbursement of any
obligor on any letter of credit, banker’s acceptance or similar credit
transaction, whether or not then due;


 


(6) guarantees and other contingent obligations in
respect of Indebtedness referred to in clauses (1) through (5) above and clause
(8) below;


 


(7) all Obligations of any other Person of the type
referred to in clauses (1) through (6) which are secured by any Lien on any
property or asset of such Person, the amount of any such Obligation being
deemed to be the lesser of the Fair Market Value of the property or asset
securing such Obligation or the amount of such Obligation;


 


(8) all Interest Swap Obligations and all Obligations
under Currency Agreements of such Person; and


 


(9) all Disqualified Capital Stock issued by such
Person with the amount of Indebtedness represented by such Disqualified Capital
Stock being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any.


 


Notwithstanding the foregoing, “Indebtedness” shall
not include any Qualified Capital Stock.


 


For purposes hereof, the “maximum fixed repurchase
price” of any Disqualified Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant
to this Indenture, and if such price is based upon, or measured by, the Fair
Market Value of such Disqualified Capital Stock, such Fair Market Value shall
be determined reasonably and in good faith by the Board of Directors of the
issuer of such Disqualified Capital Stock.


 


“Indenture” means this Indenture, as amended or
supplemented from time to time in accordance with the terms hereof.


 


“Indenture Agent” means any Registrar, Paying
Agent or co-Registrar.


 


“Indenture Documents” means, collectively, the
Indenture, the Notes, the Guarantees and the Collateral Agreements.


 


“Independent Financial Advisor” means a
nationally-recognized accounting, appraisal or investment banking firm: (1)
that does not, and whose directors, officers and employees or Affiliates do
not, have a direct or indirect financial interest in the Company; and (2) that,
in the judgment of the Board of Directors of the Company, is otherwise
independent and qualified to perform the task for which it is to be engaged.


 


“Initial Notes”means the 91⁄2% Senior Secured
Notes due 2008 issued on the Issue Date.


 


“Initial Purchaser” means Jefferies &
Company, Inc.


 


“Institutional Accredited Investor” means an
institution that is an “accredited investor” as that term is defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.


 


12

















 


“Intercreditor Agreement” means the
Intercreditor Agreement, dated as of the Issue Date, among the Agent, the Trustee
and the Collateral Agent, the Company and the Guarantors, as the same may be
amended, restated, supplemented or otherwise modified from time to time.


 


“Interest Payment Date” means the stated
maturity of an installment of interest on the Notes.


 


“Interest Swap Obligations” means the
obligations of any Person pursuant to any arrangement with any other Person,
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount in exchange for periodic payments
made by such other Person calculated by applying a fixed or a floating rate of
interest on the same notional amount and shall include, without limitation,
interest rate swaps, caps, floors, collars and similar agreements.


 


“Investment” means, with respect to any Person,
any direct or indirect loan or other extension of credit (including, without
limitation, a guarantee) or capital contribution to (by means of any transfer
of cash or other property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition for value by such
Person of any Capital Stock, bonds, notes, debentures or other securities or
evidences of Indebtedness issued by, any other Person. “Investment” shall
exclude extensions of trade credit by the Company and its Restricted
Subsidiaries on commercially reasonable terms in accordance with normal trade
practices of the Company and or such Restricted Subsidiary, as the case may
be.  For the purposes of
Section 4.10, (i) “Investment” shall include and be valued at the Fair
Market Value of the net assets of any Restricted Subsidiary at the time that
such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall
exclude the Fair Market Value of the net assets of any Unrestricted Subsidiary
at the time that such Unrestricted Subsidiary is designated a Restricted
Subsidiary and (ii) the amount of any Investment shall be the original cost of
such Investment plus the cost of all additional Investments by the Company or
any of its Restricted Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to
such Investment, reduced by the payment of dividends or distributions in
connection with such Investment or any other amounts received in respect of
such Investment; provided that no
such payment of dividends or distributions or receipt of any such other amounts
shall reduce the amount of any Investment if such payment of dividends or
distributions or receipt of any such amounts would be included in Consolidated
Net Income. If the Company or any Restricted Subsidiary sells or otherwise
disposes of any Capital Stock of a Restricted Subsidiary (including any
issuance of Capital Stock by a Restricted Subsidiary) such that, after giving
effect to any such sale or disposition, such Restricted Subsidiary would cease
to be a Subsidiary of the Company, the Company shall be deemed to have made an
“Investment” on the date of any such sale or disposition equal to sum of the
Fair Market Value of the Capital Stock of such former Restricted Subsidiary
held by the Company or any Restricted Subsidiary immediately following such
sale or other disposition.


 


“Issue Date” means the date of original
issuance of the Notes.


 


“Legal Defeasance” has the meaning set forth in
Section 8.01(b).


 


“Legal Holiday” has the meaning set forth in Section 11.07.


 


“Lenders” has the meaning set forth in the
definition of the term “Credit Agreement.”


 


“Lien” means any lien, mortgage, deed of trust,
pledge, security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof and any agreement to give any security interest).


 


13

















 


“Maturity Date” means December 15, 2008.


 


“Mortgages” means the mortgages, deeds
of trust, deeds to secure Indebtedness or other similar documents providing
Liens on the Premises and/or the Leased Premises (if any), as well as the other
Collateral secured by and described in the mortgages, deeds of trust, deeds to
secure Indebtedness or other similar documents.


 


“Net Cash Proceeds” means, with respect to any
Asset Sale, the proceeds in the form of cash or Cash Equivalents including
payments in respect of deferred payment obligations when received in the form
of cash or Cash Equivalents (other than the portion of any such deferred
payment constituting interest) received by the Company or any of its Restricted
Subsidiaries from such Asset Sale net of:


 


(1)                                  reasonable out-of-pocket expenses and
fees relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees and sales commissions);


 


(2)                                  all taxes and other costs and expenses
actually paid or estimated by the Company (in good faith) to be payable in cash
in connection with such Asset Sale;


 


(3)                                  repayment of Indebtedness that is secured
by the property or assets that are the subject of such Asset Sale and is
required to be repaid in connection with such Asset Sale; and


 


(5)                                  appropriate amounts to be provided by the
Company or any Restricted Subsidiary, as the case may be, as a reserve, in
accordance with GAAP, against any liabilities associated with such Asset Sale
and retained by the Company or any Restricted Subsidiary, as the case may be,
after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental matters
and liabilities under any indemnification obligations associated with such
Asset Sale;


 


provided, however, that if, after the
payment of all taxes with respect to such Asset Sale, the amount of estimated
taxes, if any, pursuant to clause (2) above exceeded the tax amount actually
paid in cash in respect of such Asset Sale, the aggregate amount of such excess
shall, at such time, constitute Net Cash Proceeds.


 


“Non-U.S. Person” means a Person who is not a
U.S. person, as defined in Regulation S.


 


“Notes” means collectively, the Initial Notes,
the Additional Notes and the Exchange Notes.


 


“Obligations” means all obligations for
principal, premium, interest, Additional Interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.


 


“Offering Circular” means the Offering Circular
dated December 10, 2003 relating to the offering of the Notes.


 


“Officer” means the Chief Executive Officer,
the President, the Chief Financial Officer or any Vice President of the
Company.


 


“Officers’ Certificate” means a certificate
signed by two Officers of the Company, at least one of whom shall be the
principal financial officer of the Company and delivered to the Trustee and


 


14

















 


otherwise complying with
the requirements of Sections 11.04 and 11.05, as they relate to
the making of an Officers’ Certificate.


 


“Opinion of Counsel” means a written opinion
from legal counsel, who may be counsel for the Company and who is reasonably
acceptable to the Trustee or Collateral Agent, as applicable, complying with
the requirements of Sections 11.04 and 11.05, as they relate to
the giving of an Opinion of Counsel.


 


“Paying Agent” has the meaning set forth in Section 2.03.


 


“Permitted Holders” means KPS Investors, LLC,
KPS Special Situations Fund, L.P., KPS Supplemental Fund, L.P. and their
respective Affiliates.


 


“Permitted Indebtedness” means, without
duplication, each of the following:


 


(1)                                  Indebtedness under the Initial Notes (and
the related Guarantees) issued on the Issue Date in an aggregate principal
amount not to exceed $125 million and Indebtedness under the Exchange Notes
(and the related Guarantees);


 


(2)                                  Indebtedness incurred pursuant to the
Credit Agreement, in an aggregate principal amount at any time outstanding not
to exceed $45 million as such amount may be reduced from time to time as a
result of permanent reductions of the revolving commitments thereunder as
provided in Section 4.16;


 


(3)                                  other Indebtedness of the Company and its
Restricted Subsidiaries outstanding on the Issue Date;


 


(4)                                  Interest Swap Obligations of the Company
or any Restricted Subsidiary of the Company covering Indebtedness of the
Company or any of its Restricted Subsidiaries; provided, however,
that such Interest Swap Obligations are entered into for the purpose of fixing
or hedging interest rates with respect to any fixed or variable rate
Indebtedness that is permitted by this Indenture to be outstanding to the
extent that the notional amount of any such Interest Swap Obligation does not
exceed the principal amount of Indebtedness to which such Interest Swap
Obligation relates;


 


(5)                                  Indebtedness under Currency Agreements; provided
that in the case of Currency Agreements which relate to Indebtedness,
such Currency Agreements do not increase the Indebtedness of the Company and
its Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;


 


(6)                                  intercompany Indebtedness of the Company
or a Guarantor for so long as such Indebtedness is held by the Company or a
Guarantor; provided that if as of
any date any Person other than the Company or a Guarantor owns or holds any
such Indebtedness or holds a Lien in respect of such Indebtedness, such date
shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness under this clause (6) by the issuer of such Indebtedness;


 


(7) Indebtedness arising from the honoring by a bank
or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within three business days of
incurrence;


 


15

















 


(8) Indebtedness of the Company or any of its
Restricted Subsidiaries represented by letters of credit for the account of the
Company or such Restricted Subsidiary, as the case may be, in order to provide
security for workers’ compensation claims, payment obligations in connection
with self-insurance or similar requirements in the ordinary course of business;


 


(9) Indebtedness represented by Capitalized Lease
Obligations and Purchase Money Indebtedness of the Company and its Restricted
Subsidiaries incurred in the ordinary course of business (including
Refinancings thereof that do not result in an increase in the aggregate
principal amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium required to be paid under the terms
of the instrument governing such Indebtedness and plus the amount of reasonable
expenses incurred by the Company in connection with such Refinancing)) not to
exceed $10 million at any time outstanding;


 


(10) Refinancing Indebtedness;


 


(11) Indebtedness represented by guarantees by the
Company or a Restricted Subsidiary of Indebtedness incurred by the Company or a
Restricted Subsidiary so long as the incurrence of such Indebtedness by the
Company or any such Restricted Subsidiary is otherwise permitted by the terms
of the Indenture;


 


(12) Indebtedness arising from agreements of the
Company or a Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred in connection with the
disposition of any business, assets or Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company and the Subsidiary in connection with
such disposition;


 


(13) Indebtedness of the Company or any of its
Restricted Subsidiaries to the extent the net proceeds thereof are promptly
used to redeem the Notes in full or deposited to defease or discharge the
Notes, in each case, in accordance with the Indenture; and


 


(14) additional Indebtedness of the Company and its
Restricted Subsidiaries in an aggregate principal amount not to exceed $5
million at any time outstanding (which amount may, but need not, be incurred in
whole or in part under the Credit Agreement).


 


For purposes of determining compliance with
Section 4.12, (a) the outstanding principal amount of any item of
Indebtedness shall be counted only once and (b) in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted
Indebtedness described in clauses (1) through (14) above or is entitled to be
incurred pursuant to Section 4.12, the Company shall, in its sole
discretion, classify (or later reclassify) such item of Indebtedness in any
manner that complies with this covenant. Accrual of interest, accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and
the payment of dividends on Disqualified Capital Stock in the form of
additional shares of the same class of Disqualified Capital Stock will not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified
Capital Stock for purposes of Section 4.12.


 


“Permitted Investments” means:


 


(1)                                  Investments by the Company or any
Restricted Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Guarantor or that will merge or


 


16

















 


consolidate with or into
the Company or a Guarantor, or that transfers or conveys all or substantially
all of its assets to the Company or a Guarantor;


 


(2) Investments in the Company by any Restricted
Subsidiary of the Company; provided that
any Indebtedness evidencing such Investment is unsecured and subordinated,
pursuant to a written agreement, to the Company’s Obligations under the Notes
and the Indenture;


 


(3) Investments in cash and Cash Equivalents;


 


(4) Currency Agreements and Interest Swap Obligations
entered into in the ordinary course of the Company’s or its Restricted
Subsidiaries’ businesses and otherwise in compliance with the Indenture;


 


(5) Investments in the Notes;


 


(6) Investments in securities of trade creditors or
customers received pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade creditors or
customers in exchange for claims against such trade creditors or customers;


 


(7) Investments made by the Company or its Restricted
Subsidiaries as a result of consideration received in connection with an Asset
Sale made in compliance with Section 4.16;


 


(8) Investments in existence on the Issue Date;


 


(9) loans and advances, including advances for travel
and moving expenses, to employees, officers and directors of the Company and
its Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes not in excess of $1.0 million at any one time outstanding;


 


(10) advances to suppliers and customers in the ordinary
course of business; and


 


(11) additional Investments in an aggregate amount not
to exceed $10 million at any time outstanding.


 


“Permitted Liens” means the following types of
Liens:


 


(1)                                  Liens for taxes, assessments or
governmental charges or claims either (a) not delinquent or (b) contested in
good faith by appropriate proceedings and as to which the Company or any of its
Restricted Subsidiaries shall have set aside on its books such reserves as may
be required pursuant to GAAP;


 


(2)                                  statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other
Liens imposed by law or pursuant to customary reservations or retentions of
title incurred in the ordinary course of business for sums not yet delinquent
or being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in respect
thereof;


 


(3)                                  Liens incurred or deposits made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business consistent
with past practice in connection therewith, or to secure the performance of
tenders, statutory obligations, surety and appeal


 


17

















 


bonds, bids, leases,
government contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);


 


(4) any judgment Lien not giving rise to an Event of
Default;


 


(5) easements, rights-of-way, zoning restrictions and
other similar charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of the business
of the Company or any of its Restricted Subsidiaries;


 


(6) any interest or title of a lessor under any
Capitalized Lease Obligation permitted pursuant to clause (12) of the
definition of “Permitted Indebtedness;” provided
that such Liens do not extend to any property or assets which is not
leased property subject to such Capitalized Lease Obligation;


 


(7) Liens securing Purchase Money Indebtedness
permitted pursuant to clause (9) of the definition of “Permitted Indebtedness;”
provided, however, that (a) the
Indebtedness shall not exceed the cost of the property or assets acquired,
together, in the case of real property, with the cost of the construction
thereof and improvements thereto, and shall not be secured by a Lien on any
property or assets of the Company or any Restricted Subsidiary of the Company
other than such property or assets so acquired or constructed and improvements
thereto and (b) the Lien securing such Indebtedness shall be created within 180
days of such acquisition or construction or, in the case of a refinancing of
any Purchase Money Indebtedness, within 180 days of such refinancing;


 


(8) Liens upon specific items of inventory or other
goods and proceeds of any Person securing such Person’s obligations in respect
of bankers’ acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other goods;


 


(9) Liens securing reimbursement obligations with
respect to commercial letters of credit which encumber documents and other
property relating to such letters of credit and products and proceeds thereof;


 


(10) Liens encumbering deposits made to secure
obligations arising from statutory, regulatory, contractual, or warranty
requirements of the Company or any of its Restricted Subsidiaries, including
rights of offset and set-off;


 


(11) Liens securing Interest Swap Obligations which
Interest Swap Obligations relate to Indebtedness that is otherwise permitted
under the Indenture;


 


(12) Liens securing Indebtedness under Currency
Agreements that are permitted under the Indenture;


 


(13) Liens securing Acquired Indebtedness incurred in
accordance with Section 4.12; provided that:
(a) such Liens secured such Acquired Indebtedness at the time of and prior to the
incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company and were not granted in connection with, or in
anticipation of, the incurrence of such Acquired Indebtedness by the Company or
a Restricted Subsidiary of the Company; and (b) such Liens do not extend to or
cover any property or assets of the Company or of any of its Restricted
Subsidiaries other than the property or assets that secured the Acquired
Indebtedness prior to the time such Indebtedness became Acquired Indebtedness
of the Company or a Restricted Subsidiary of the Company and are no more
favorable to the lienholders than those securing the Acquired Indebtedness
prior to the incurrence of such Acquired Indebtedness by the Company or a
Restricted Subsidiary of the Company;


 


18

















 


(14) Liens existing as of the Issue Date and securing
Indebtedness permitted to be outstanding under clause (3) of the definition of
the term “Permitted Indebtedness” to the extent and in the manner such Liens
are in effect on the Issue Date;


 


(15) Liens securing the Notes and all other monetary
obligations under the Indenture and the Guarantees;


 


(16) Liens securing Indebtedness under the Credit
Agreement to the extent such Indebtedness is permitted under clause (2) or (14)
of the definition of the term “Permitted Indebtedness” and all other
Obligations thereunder; provided,
that any such Liens on Priority Collateral shall be subordinated to the Liens
securing the Notes pursuant to the Intercreditor Agreement; and


 


(17) Liens securing Refinancing Indebtedness which is
incurred to Refinance any Indebtedness which has been secured by a Lien
permitted under this paragraph and which has been incurred in accordance with
Section 4.12; provided, however, that such Liens: (i) are no less
favorable to the Holders and are not more favorable to the lienholders with
respect to such Liens than the Liens in respect of the Indebtedness being
Refinanced; and (ii) do not extend to or cover any property or assets of the
Company or any of its Restricted Subsidiaries not securing the Indebtedness so
Refinanced.


 


“Person” means an individual, partnership,
corporation, limited liability company, unincorporated organization, trust or
joint venture, or a governmental agency or political subdivision thereof.


 


“Physical Notes” has the meaning set forth in Section 2.14(b).


 


“Preferred Stock” of any Person means any
Capital Stock of such Person that has preferential rights to any other Capital
Stock of such Person with respect to dividends or redemptions or upon
liquidation.


 


“Premises” has the meaning set forth in Section 4.21.


 


“principal” of any Indebtedness (including the
Notes) means the principal amount of such Indebtedness plus the premium, if
any, on such Indebtedness.


 


“Priority Collateral” means all Collateral
other than Senior Lender Priority Collateral.


 


“Private Placement Legend” means the legend set
forth on the Initial Notes in the form set forth in Exhibit C.


 


“pro forma” means, with respect to any calculation
made or required to be made pursuant to the terms of this Indenture, a
calculation made in accordance with Article 11 of Regulation S-X under the
Securities Act, as determined by the Board of Directors of the Company in
consultation with its independent public accountants.


 


“Public Equity Offering” means an underwritten
public offering of Common Stock of the Company or any holding company of the
Company pursuant to a registration statement filed with the Commission (other
than on Form S-8).


 


“Purchase Money Indebtedness” means
Indebtedness of the Company and its Restricted Subsidiaries incurred for the
purpose of financing all or any part of the purchase price, or the cost of
installation, construction or improvement, of property or equipment, provided, that the aggregate principal


 


19

















 


amount of such
Indebtedness does not exceed the lesser of the Fair Market Value of such
property or such purchase price or cost.


 


“QIB” means a “qualified institutional buyer”
as defined in Rule 144A.


 


“Qualified Capital Stock” means any Capital
Stock that is not Disqualified Capital Stock.


 


“Record Date” means any of the Record Dates
specified in the Notes, whether or not a Legal Holiday.


 


“Redemption Date” means, when used with respect
to any Note to be redeemed, the date fixed for redemption of such Note pursuant
to this Indenture and the Notes.


 


“Redemption Price” means, when used with
respect to any Note to be redeemed, the price fixed for redemption pursuant to
this Indenture and the Notes.


 


“Reference Date” has the meaning set forth in Section 4.10.


 


“Refinance” means, in respect of any security
or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem,
defease or retire, or to issue a security or Indebtedness in exchange or
replacement for, such security or Indebtedness in whole or in part. “Refinanced”
and “Refinancing” shall have correlative meanings.


 


“Refinancing Indebtedness” means any
Refinancing by the Company or any Restricted Subsidiary of the Company of
Indebtedness incurred in accordance with Section 4.12 (other than pursuant
to Permitted Indebtedness) or clauses (1), (3) or (10) of the definition of
Permitted Indebtedness, in each case that does not:


 


(1) have an aggregate
principal amount (or, if such Indebtedness is issued with original issue
discount, an aggregate offering price) greater than the sum of (x) the
aggregate principal amount of the Indebtedness being Refinanced (or, if such
Indebtedness being Refinanced is issued with original issue discount, the
aggregate accreted value) as of the date of such proposed Refinancing plus (y)
the amount of fees, expenses, premium, defeasance costs and accrued but unpaid
interest relating to the Refinancing of such Indebtedness being Refinanced;


 


(2) create Indebtedness
with: (a) a Weighted Average Life to Maturity that is less than the Weighted
Average Life to Maturity of the Indebtedness being Refinanced; or (b) a final
maturity earlier than the final maturity of the Indebtedness being Refinanced;
or


 


(3) affect the security,
if any, for such Refinancing Indebtedness (except to the extent that less
security is granted to holders of such Refinancing Indebtedness).


 


If such Indebtedness
being Refinanced is subordinate or junior by its terms to the Notes, then such
Refinancing Indebtedness shall be subordinate by its terms to the Notes at
least to the same extent and in the same manner as the Indebtedness being
Refinanced


 


“Registrar” has the meaning set forth in Section 2.03.


 


“Registration Rights Agreement” means
(1) with respect to the Initial Notes issued on the Issue Date, the
Registration Rights Agreement, dated December 17, 2003, among the Company,
the Guarantors and the Initial Purchaser, and (2) with respect to each
issuance of Additional Notes issued in a


 


20

















 


transaction exempt from
the registration requirements of the Securities Act, the registration rights
agreement, if any, among the Company, the Guarantors and the initial purchasers
under the related Purchase Agreement, in each case as the same may be amended
or modified from time to time in accordance with the terms thereof.


 


“Regulation S” means Regulation S under the
Securities Act.


 


“Regulation S Permanent Global Note” means a
permanent Global Note deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.


 


“Regulation S Temporary Global Note” means a
temporary Global Note deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Initial Notes or Additional Notes initially
sold in reliance on Rule 903 of Regulation S.


 


“Replacement Assets” has the meaning set forth
in Section 4.16(3)(b).


 


“Restricted Payment” has the meaning set forth
in Section 4.10.


 


“Restricted Period” means the 40-day distribution
compliance period as defined in Regulation S.


 


“Restricted Security” has the meaning assigned
to such term in Rule 144(a)(3) under the Securities Act; provided  that
the Trustee shall be entitled to request and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.


 


“Restricted Subsidiary” of any Person means any
Subsidiary of such Person which at the time of determination is not an
Unrestricted Subsidiary.


 


“Rule 144A” means Rule 144A under the Securities
Act.


 


“Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations of the Commission promulgated
thereunder.


 


“Security Agreement” means, collectively, the
Noteholder Security Agreement, Issuer Pledge Agreement, Trademark Security
Agreement and Patent Security Agreement, each dated as of the Issue Date, made
by the Company and the Guarantors in favor of the Collateral Agent, as amended
or supplemented from time to time in accordance with their terms.


 


“Senior Lender Priority Collateral” shall have
the meaning ascribed thereto in the Intercreditor Agreement.


 


“Significant Subsidiary” with respect to any
Person, means any Restricted Subsidiary of such Person that satisfies the
criteria for a “significant subsidiary” set forth in Rule 1-02(w) of Regulation
S-X under the Exchange Act.


 


“Subsidiary” with respect to any Person, means:


 


21

















 


(1)                                  any corporation of which the outstanding
Capital Stock having at least a majority of the votes entitled to be cast in
the election of directors under ordinary circumstances shall at the time be
owned, directly or indirectly, by such Person or one or more Subsidiaries of
such Person (or any combination thereof); or


 


(2)                                  any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, owned by such Person or one or more Subsidiaries of
such Person (or any combination thereof).


 


“TIA” means the Trust Indenture Act of 1939 (15
U.S.C. §§ 77aaa-77bbbb), as amended, as in effect on the date of this
Indenture, except as otherwise set forth in Section 9.03.


 


“Trust Officer” means any officer of the
Trustee assigned by the Trustee to administer this Indenture or, in the case of
a successor trustee, an officer assigned to the department, division or group
performing the corporation trust work of such successor and assigned to
administer this Indenture.


 


“Trustee” means the party named as such in this
Indenture until a successor replaces it in accordance with the provisions of
this Indenture and thereafter means such successor.


 


“Unrestricted Subsidiary” of any Person means:


 


(1)                                  any Subsidiary of such Person that at the
time of determination shall be or continue to be designated an Unrestricted
Subsidiary by the Board of Directors of such Person in the manner provided
below; and


 


(2)                                  any Subsidiary of an Unrestricted
Subsidiary.


 


The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated, provided
that:


 


(1)                                  the Company certifies to the Trustee that
such designation complies with Section 4.10; and


 


(2)                                  each Subsidiary to be so designated and
each of its Subsidiaries has not at the time of designation, and does not
thereafter, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness pursuant to
which the lender has recourse to any of the assets of the Company or any of its
Restricted Subsidiaries.


 


The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary only if:


 


(1)                                  immediately after giving effect to such
designation, the Company is able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.12;
and


 


(2)                                  immediately before and immediately after
giving effect to such designation, no Default or Event of Default shall have
occurred and be continuing.


 


22

















 


Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
Board Resolution giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the foregoing provisions.


 


“U.S. Government Obligations” means direct
obligations of, and obligations guaranteed by, the United States of America for
the payment of which the full faith and credit of the United States of America
is pledged.


 


“U.S. Legal Tender” means such coin or currency
of the United States which, as at the time of payment, shall be immediately
available legal tender for the payment of public and private debts.


 


“Voting Stock” means, with respect to any
Person, securities of any class or classes of Capital Stock of such Person
entitling the holders thereof (whether at all times or only so long as no
senior class of stock has voting power by reason of any contingency) to vote in
the election of members of the Board of Directors of such Person.


 


“Weighted Average Life to Maturity” means, when
applied to any Indebtedness at any date, the number of years obtained by
dividing (a) the then outstanding aggregate principal amount of such
Indebtedness into (b) the sum of the total of the products obtained by
multiplying (i) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal, including payment at
final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) which will elapse between such date and the making of
such payment.


 


“Wholly-Owned Subsidiary” of any Person means
any Restricted Subsidiary of such Person of which all the outstanding Capital
Stock (other than in the case of a Foreign Restricted Subsidiary, directors’
qualifying shares or an immaterial amount of shares required to be owned by
other Persons pursuant to applicable law) are owned by such Person or any
Wholly-Owned Subsidiary of such Person.


 


SECTION 1.02.  Incorporation by Reference of
Trust Indenture Act.


 


Whenever this Indenture
refers to a provision of the TIA, such provision is incorporated by reference
in, and made a part of, this Indenture. 
The following TIA terms used in this Indenture have the following
meanings:


 


“indenture securities” means the Notes.


 


“indenture security holder” means a Holder.


 


“indenture to be qualified” means this
Indenture.


 


“indenture trustee” or “institutional
trustee” means the Trustee.


 


“obligor” on the indenture securities means the
Company or any other obligor on the Notes.


 


All other TIA terms used in
this Indenture that are defined by the TIA, defined by TIA reference to another
statute or defined by Commission rule and not otherwise defined herein have the
meanings assigned to them therein.


 


23

















 


SECTION 1.03.  Rules of Construction.


 


Unless the context otherwise
requires:


 


(1)                                  a term has the meaning assigned to it;


 


(2)                                  an accounting term not otherwise defined
has the meaning assigned to it in accordance with GAAP;


 


(3)                                  “or” is not exclusive;


 


(4)                                  words in the singular include the plural,
and words in the plural include the singular;


 


(5)                                  “herein,” “hereof” and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;


 


(6)                                  when the words “includes” or “including”
are used herein, they shall be deemed to be followed by the words “without
limitation”;


 


(7)                                  all references to Sections or Articles
refer to Sections or Articles of this Indenture unless otherwise indicated;


 


(8)                                  any reference to a statute, law or
regulation means that statute, law or regulation as amended and in effect from
time to time and includes any successor statute, law or regulation; and


 


(9)                                  provisions apply to successive events and
transactions.


 


ARTICLE TWO


 


THE NOTES


 


SECTION 2.01.  Form and Dating.


 


The Initial Notes and the
Additional Notes and the Trustee’s certificate of authentication thereon shall
be substantially in the form of Exhibit A hereto.  The Exchange Notes and the Trustee’s certificate
of authentication thereon shall be substantially in the form of Exhibit B
hereto.  The Notes may have notations,
legends or endorsements required by law, stock exchange rule or Depository rule
or usage.  The Company shall approve the
form of the Notes and any notation, legend or endorsement on them.  Each Note shall be dated the date of its
authentication.


 


The terms and provisions
contained in the forms of the Notes annexed hereto as Exhibit A and Exhibit
B, shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.


 


Notes offered and sold in
reliance on Rule 144A shall be issued initially in the form of one or more
permanent Global Notes in registered form, substantially in the form set forth
in Exhibit A hereto (“Global Notes”), deposited with the
Trustee, as custodian for the Depository, duly executed by the


 


24

















 


Company
and authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Exhibit C.


 


Notes offered and sold to
Institutional Accredited Investors in reliance on Rule 501(a)(1), (2), (3) or
(7) under the Securities Act shall be issued initially in the form of one or
more permanent Global Notes deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in Exhibit C.


 


Notes offered and sold in
offshore transactions in reliance on Regulation S shall be issued
initially in the form of one or more temporary Global Notes (a “Regulation S
Temporary Global Note”) deposited with the Trustee, as custodian for the
Depository, and registered in the name of the Depositary or the nominee of the
Depositary for the accounts of designated agents holding on behalf of Euroclear
or Clearstream, duly executed by the Company and authenticated by the Trustee
as hereinafter provided and shall bear the legend set forth in Exhibit C.


 


Following the termination of the Restricted Period,
beneficial interests in a Regulation S Temporary Global Note will be exchanged
for beneficial interests in a Regulation S Permanent Global Note pursuant to
the Applicable Procedures. 
Simultaneously with the authentication of a Regulation S Permanent
Global Note, the Trustee will cancel the related Regulation S Temporary Global Note.


 


The provisions of the “Operating Procedures of the
Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the
“General Terms and Conditions of Clearstream Banking” and “Customer Handbook”
of Clearstream will be applicable to transfers of beneficial interests in the
Regulation S Temporary Global Note and the Regulation S Permanent Global Note
that are held by participants through Euroclear or Clearsteam.


 


The aggregate principal
amount of any Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the
Depository, as hereinafter provided.


 


The definitive Notes shall
be typed, printed, lithographed or engraved or produced by any combination of
these methods or may be produced in any other manner permitted by the rules of
any securities exchange on which the Notes may be listed, all as determined by
the Officers executing such Notes, as evidenced by their execution of such
Notes.


 


SECTION 2.02.  Execution and Authentication;
Aggregate Principal Amount.


 


An Officer (who shall have
been duly authorized by all requisite corporate actions) shall sign the Notes
for the Company by manual or facsimile signature.


 


If an Officer whose
signature is on a Note was an Officer at the time of such execution but no
longer holds that office or position at the time the Trustee authenticates the
Note, the Note shall nevertheless be valid.


 


A Note shall not be valid
until an authorized signatory of the Trustee manually signs the certificate of
authentication on the Note.  The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.


 


The Trustee shall
authenticate (i) Initial Notes for original issue in the aggregate
principal amount not to exceed $125,000,000 (ii) Exchange Notes from time
to time for issue only pursuant to the Registration Rights Agreement in
exchange for a like principal amount of Initial Notes or Additional


 


25

















 


Notes,
and (iii) subject to compliance with Section 4.12, one or more
series of Additional Notes for original issue after the Issue Date, in each
case upon written orders of the Company in the form of an Officers’
Certificate, which Officers’ Certificate shall, in the case of any issuance of
Additional Notes, certify that such issuance is in compliance with Section 4.12.  In addition, each Officers’ Certificate
shall specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated, whether the Notes are to be Initial Notes,
Exchange Notes or Additional Notes.  All
Notes issued under this Indenture shall vote and consent together on all
matters as one class and no series of Notes shall have the right to vote or
consent as a separate class on any matter.


 


The Trustee may appoint an
authenticating agent (the “Authenticating Agent”) reasonably acceptable
to the Company to authenticate Notes. 
Unless otherwise provided in the appointment, an Authenticating Agent
may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent.  An Authenticating Agent has the
same rights as an Indenture Agent to deal with the Company and Affiliates of the
Company.


 


The Notes shall be issuable
in fully registered form only, without coupons, in denominations of $1,000 in
principal amount and any integral multiple thereof.


 


SECTION 2.03.  Registrar and Paying Agent.


 


The Company shall maintain
an office or agency which shall initially be the office of the Trustee in the
Borough of Manhattan, The City of New York, where (a) Notes may be
presented or surrendered for registration of transfer or for exchange (the “Registrar”),
(b) Notes may be presented or surrendered for payment (the “Paying
Agent”) and (c) notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served. 
The Registrar shall keep a register of the Notes and of their transfer
and exchange.  The Company, upon prior
written notice to the Trustee, may have one or more co-Registrars and one or
more additional Paying Agents reasonably acceptable to the Trustee.  The term “Paying Agent” includes any
additional Paying Agent.  Neither the
Company nor any Affiliate of the Company may act as Paying Agent.


 


The Company shall enter into
an appropriate agency agreement with any Indenture Agent not a party to this
Indenture, which agreement shall incorporate the provisions of the TIA and
implement the provisions of this Indenture that relate to such Indenture
Agent.  The Company shall notify the
Trustee in writing, in advance, of the name and address of any such Indenture
Agent.  If the Company fails to maintain
a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such.


 


The Company initially
appoints the Trustee as Registrar, Paying Agent and agent for service of
demands and notices in connection with the Notes.  The Paying Agent or Registrar may resign upon thirty (30) days’
written notice to the Company.


 


SECTION 2.04.  Obligations of Paying Agent.


 


The Company shall require
each Paying Agent other than the Trustee to agree in writing that such Paying
Agent shall hold separate and apart from, and not commingle with any other
properties, for the benefit of the Holders or the Trustee, all assets held by
the Paying Agent for the payment of principal of, or interest on, the Notes
(whether such assets have been distributed to it by the Company or any other
obligor on the Notes), and the Paying Agent shall promptly notify the Trustee
in writing of any Default by the Company (or any other obligor on the Notes) in
making any such payment.  The Company at
any time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed, and the Trustee may at any time
during the continuance of any payment Default,


 


26

















 


upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets
distributed.  Upon receipt by the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.


 


SECTION 2.05.  Holder Lists.


 


The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of the Holders and shall otherwise
comply with TIA Section 312(a).  If
the Trustee is not the Registrar, the Company shall furnish or cause the
Registrar to furnish to the Trustee before each Record Date and at such other
times as the Trustee may request in writing a list as of such date and in such
form as the Trustee may reasonably request of the names and addresses of the
Holders, which list may be conclusively relied upon by the Trustee.


 


SECTION 2.06.  Transfer and Exchange.


 


Subject to the provisions of
Sections 2.14 and 2.15, when Notes are presented to the Registrar
or a co-Registrar with a request to register the transfer of such Notes or to
exchange such Notes for an equal principal amount of Notes of other authorized
denominations, the Registrar or co-Registrar shall register the transfer or
make the exchange as requested; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar or co-Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing and such other
documents as the Registrar or Co-Registrar may reasonably require.  To permit registrations of transfers and
exchanges, the Company shall issue and the Trustee shall authenticate Notes at
the Registrar’s or co-Registrar’s request. 
No service charge shall be made for any registration of transfer or
exchange, but the Company or the Trustee may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant to Section 2.10,
3.06, 4.15, 4.16 or 9.05, in which event the
Company shall be responsible for the payment of such taxes).


 


The Registrar or
co-Registrar shall not be required to register the transfer or exchange of any
Note (i) during a period beginning at the opening of business fifteen (15)
days before the mailing of a notice of redemption of Notes and ending at the close
of business on the day of such mailing and (ii) selected for redemption in
whole or in part pursuant to Article Three, except the unredeemed
portion of any Note being redeemed in part.


 


Any Holder of a Global Note
shall, by acceptance of such Global Note, agree that transfers of beneficial
interests in such Global Note may be effected only through the Depository, in
accordance with this Indenture and the Applicable Procedures.


 


SECTION 2.07.  Replacement Notes.


 


If a mutilated Note is
surrendered to the Trustee or if the Holder of a Note claims in writing that
the Note has been lost, destroyed or wrongfully taken, then, in the absence of
written notice to the Company or the Trustee that such Note has been acquired
by a protected purchaser, the Company shall issue and the Trustee shall
authenticate a replacement Note of like tenor and principal amount and bearing
a number not contemporaneously outstanding if the Trustee’s requirements are
met.  Except with respect to mutilated
Notes, if required by the Trustee or the Company, such Holder must provide an
affidavit of lost certificate and an indemnity bond or other indemnity,
sufficient in the judgment of both the Company and the Trustee, to protect the
Company, the Trustee or any Indenture Agent from any loss


 


27

















 


which
any of them may suffer if a Note is replaced. 
The Company may charge such Holder for its reasonable out-of-pocket
expenses in replacing a Note, including reasonable fees and expenses of its
counsel and of the Trustee and its counsel. 
In case any mutilated, lost, destroyed or wrongfully taken Note has
become or is about to become due and payable, the Company in its discretion may
pay such Note instead of issuing a new Note in replacement thereof.  Every replacement Note shall constitute an
additional obligation of the Company, entitled to the benefits of this
Indenture.


 


SECTION 2.08.  Outstanding Notes.


 


Notes outstanding at any
time are all the Notes that have been authenticated by the Trustee except those
cancelled by it, those delivered to it for cancellation and those described in
this Section 2.08 as not outstanding.  Subject to the provisions of Section 2.09, a Note
does not cease to be outstanding because the Company or any of its Affiliates holds
the Note.


 


If a Note is replaced
pursuant to Section 2.07 (other than a mutilated Note surrendered
for replacement), it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a protected purchaser.  A mutilated Note ceases to be outstanding
upon surrender of such Note and replacement thereof pursuant to Section 2.07.


 


If on a Redemption Date or
the Maturity Date the Paying Agent holds U.S. Legal Tender or U.S. Government
Obligations sufficient to pay all of the principal and interest due on the
Notes payable on that date and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Notes cease to be outstanding and interest on them ceases to accrue.


 


SECTION 2.09.  Treasury Notes; When Notes Are
Disregarded.


 


In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver, consent or notice, Notes owned by the Company or any of its
Affiliates shall be considered as though they are not outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which the Trustee
actually knows are so owned shall be so considered.  Notes so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right so to act with respect to such Notes and that the
pledgee is not the Company or any other obligor upon the Notes or any Affiliate
of the Company or of such other obligor.


 


SECTION 2.10.  Temporary Notes.


 


Until definitive Notes are
ready for delivery, the Company may prepare and execute and the Trustee shall
authenticate temporary Notes upon receipt of a written order of the Company in
the form of an Officers’ Certificate. 
The Officers’ Certificate shall specify the amount of temporary Notes to
be authenticated and the date on which the temporary Notes are to be
authenticated.  Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes.  Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate upon receipt of a written order of the Company
pursuant to Section 2.02 definitive Notes in exchange for temporary
Notes.  Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.


 


28

















 


SECTION 2.11.  Cancellation.


 


The Company at any time may
deliver Notes previously authenticated hereunder which the Company has acquired
in any lawful manner, to the Trustee for cancellation.  The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for transfer, exchange or
payment.  The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent, and no one else,
shall cancel all Notes surrendered for transfer, exchange, payment or
cancellation.  Subject to Section 2.07,
the Company may not issue new Notes to replace Notes that it has paid or
delivered to the Trustee for cancellation. 
If the Company shall acquire any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of the Indebtedness represented by
such Notes unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.11.  The Trustee shall dispose of all cancelled
Notes in accordance with customary procedures or, at the written request of the
Company, shall return the same to the Company.


 


SECTION 2.12.  CUSIP Numbers.


 


A “CUSIP” number
shall be printed on the Notes, and the Trustee shall use the CUSIP number in
notices of redemption, purchase or exchange as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Notes and that reliance may be placed only on the other identification numbers
printed on the Notes.  The Company shall
promptly notify the Trustee of any change in the CUSIP number.


 


SECTION 2.13.  Deposit of Moneys.


 


Prior to 10:00 a.m. New York
City time on each Interest Payment Date and the Maturity Date, the Company
shall deposit with the Paying Agent U.S. Legal Tender sufficient to make cash
payments, if any, due on such Interest Payment Date or the Maturity Date, as
the case may be.


 


SECTION 2.14.  Book-Entry Provisions for Global Notes.


 


(a)                                  The Global Notes initially shall
(i) be registered in the name of the Depository or the nominee of such
Depository, (ii) be delivered to the Trustee as custodian for such
Depository and (iii) bear legends as set forth in Exhibit C.


 


Members of, or participants
in, the Depository (“Agent Members”) shall have no rights under this
Indenture with respect to any Global Note held on their behalf by the
Depository, or the Trustee as its custodian, or under any Global Note, and the
Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of the Global Note for all
purposes whatsoever.  Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Note.


 


(b)                                 Transfers of the Global Notes shall be
limited to transfers in whole, but not in part, to the Depository, its
successors or their respective nominees. 
Interests of beneficial owners in the Global Notes may be transferred or
exchanged in accordance with the Applicable Procedures of the Depository and
the provisions of Section 2.15
provided, however,
that prior to the expiration of the Restricted Period, transfers of beneficial
interests in the Regulation S Temporary Global Note may not be made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser).  In


 


29

















 


addition, Notes in the form of certificated Notes in
registered form in substantially the form set forth in Exhibit A
hereto (the “Physical Notes”) shall be transferred to all beneficial
owners in exchange for their beneficial interests in the Global Notes if
(i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for the Global Notes and a successor Depository is not
appointed by the Company within ninety (90) days of such notice or (ii) an
Event of Default has occurred and is continuing and the Registrar has received
a request from the Depository to issue Physical Notes; provided that a beneficial interest in the
Regulation S Temporary Global Note may not be exchanged for a Physical Note or
transferred to a Person who takes delivery thereof in the form of a Physical
Note prior to (A) the expiration of the Restricted Period and (B) the receipt
by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B)
under the Securities Act, except in the case of a transfer pursuant to an
exemption from the registration requirements of the Securities Act other than
Rule 903 or Rule 904.


 


(c)                                  Any beneficial interest in one of the
Global Notes that is transferred to a person who takes delivery in the form of
an interest in another Global Note shall, upon transfer, cease to be an
interest in such Global Note and become a beneficial interest in such other
Global Note and, accordingly, shall thereafter be subject to all transfer
restrictions, if any, and other procedures applicable to a beneficial interest
in such other Global Notes for as long as it remains such an interest; .


 


(d)                                 In connection with any transfer or
exchange of a portion of the beneficial interest in the Global Note to
beneficial owners pursuant to paragraph (b), the Registrar shall (if one
or more Physical Notes are to be issued) reflect on its books and records the
date and a decrease in the principal amount of the Global Note in an amount
equal to the principal amount of the beneficial interest in the Global Note to
be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Physical Notes of like tenor and
aggregate principal amount.


 


(e)                                  In connection with the transfer of an
entire Global Note to beneficial owners pursuant to paragraph (b), the
Global Notes shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and deliver,
to each beneficial owner identified by the Depository in exchange for its
beneficial interest in the Global Notes, an equal aggregate principal amount of
Physical Notes of authorized denominations.


 


(f)                                    Any Physical Note constituting a
Restricted Security delivered in exchange for an interest in the Global Note
pursuant to paragraph (b) shall, except as otherwise provided by paragraphs
(a)(i)(x) and (c) of Section 2.15, bear the legend
regarding transfer restrictions applicable to the Physical Notes set forth in Exhibit
A.


 


(g)                                 The Holder of a Global Note may grant
proxies and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Notes.


 


SECTION 2.15.  Special Transfer Provisions.


 


(a)                                  Transfers to Non-QIB Institutional
Accredited Investors and Non-U.S. Persons.  The
following provisions shall apply with respect to the registration of any
proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:


 


(i)                                     the Registrar shall register the transfer
of any Note constituting a Restricted Security, whether or not such Note bears
the Private Placement Legend, if (x) the requested transfer is after
July 7, 2005 or (y) (1) in the case of a transfer to an
Institutional Accredited Investor which is not a QIB (excluding Non-U.S.
Persons), the proposed transferee has delivered


 


30

















 


to the Registrar a certificate substantially in the
form of Exhibit D hereto or (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferor has delivered to the Registrar a
certificate substantially in the form of Exhibit E hereto; and


 


(ii)                                  if the proposed transferor is an Agent
Member holding a beneficial interest in the Global Note, upon receipt by the
Registrar of (x) the certificate, if any, required by paragraph (i)
above and (y) instructions given in accordance with the Applicable
Procedures and the Registrar’s procedures,


 


whereupon (1) the Registrar shall reflect on its
books and records the date and (if the transfer does not involve a transfer of
outstanding Physical Notes) a decrease in the principal amount of the Global
Note in an amount equal to the principal amount of the beneficial interest in
the Global Note to be transferred, and (2) the Company shall execute and
the Trustee shall authenticate and deliver one or more Physical Notes of like
tenor and principal amount.


 


(b)                                 Transfers to QIBs. 
The following provisions shall apply with respect to the registration of
any proposed transfer of a Note constituting a Restricted Security to a QIB
(excluding transfers to Non-U.S. Persons):


 


(i)                                     the Registrar shall register the transfer
if such transfer is being made by a proposed transferor who has checked the box
provided for on the form of Note stating, or has otherwise advised the Company
and the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the Company
and the Registrar in writing, that it is purchasing the Note for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a QIB within the meaning of Rule
144A, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A; and


 


(ii)                                  if the proposed transferee is an Agent
Member, and the Notes to be transferred consist of Physical Notes which after
transfer are to be evidenced by an interest in the Global Note, upon receipt by
the Registrar of instructions given in accordance with the Applicable
Procedures and the Registrar’s procedures, the Registrar shall reflect on its books
and records the date and an increase in the principal amount of the Global Note
in an amount equal to the principal amount of the Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so transferred.


 


(c)                                  Private Placement Legend. 
Upon the transfer, exchange or replacement of Notes not bearing the
Private Placement Legend, the Registrar shall deliver Notes that do not bear
the Private Placement Legend.  Upon the
transfer, exchange or replacement of Notes bearing the Private Placement
Legend, the Registrar shall deliver only Notes that bear the Private Placement
Legend unless (i) the circumstance contemplated by paragraph (a)(i)(x)
of this Section 2.15 exists or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of
the Securities Act.  The Registrar shall
not register a transfer of any Note unless such transfer complies with the
restrictions on transfer of such Note set forth in this Indenture.  In connection with any transfer of Notes,
each Holder agrees by its acceptance of the Notes to furnish the Registrar or
the Company such certifications, legal opinions or other information as either
of


 


31

















 


them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not subject
to, the registration requirements of the Securities Act; provided  that
the Registrar shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.


 


(d)                                 General.  By its
acceptance of any Note bearing the Private Placement Legend, each Holder of
such a Note acknowledges the restrictions on transfer of such Note set forth in
this Indenture and in the Private Placement Legend and agrees that it shall
transfer such Note only as provided in this Indenture.


 


The Registrar
shall retain copies of all letters, notices and other written communications
received pursuant to Section 2.14 or this Section 2.15.  The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the
Registrar.


 


ARTICLE THREE


 


REDEMPTION


 


SECTION 3.01.  Optional Redemption.


 


The Company may, at its
option, redeem the Notes, in whole or in part, at specified times and under
specified conditions, as set forth in Paragraph 5 of the Notes.  If the Company elects to redeem Notes
pursuant to Paragraph 5 of the Notes, it shall, at least forty-five (45) days
(or such shorter period as the Trustee may agree) before the Redemption Date,
furnish to the Trustee and Paying Agent an Officers Certificate setting forth
the Redemption Date and the principal amount of the Notes to be redeemed and
the clause of this Indenture or the Notes pursuant to which the redemption
shall occur.


 


Each Officers’ Certificate
provided for in this Section 3.01 shall be accompanied by an
Opinion of Counsel stating that such redemption shall comply with the
conditions contained herein and in the Notes.


 


SECTION 3.02.  Selection of Notes to Be Redeemed.


 


If fewer than all of the
Notes are to be redeemed pursuant to Paragraph 5 of the Notes, the Trustee
shall select the Notes to be redeemed (1) in compliance with the requirements
of the principal national securities exchange, if any, on which such Notes are
listed or (2) if such Notes are not then listed on a national securities
exchange, on a pro  rata basis, by lot or by such other method as
the Trustee may reasonably determine is fair and appropriate, provided  that
no partial redemption will reduce the principal amount of a Note not redeemed
to less than $1,000; and provided, further, that if a partial
redemption is made with the proceeds of an Equity Offering then the selection
of the Notes or portions thereof for redemption shall be made by the Trustee
only on a pro rata basis or on as nearly a pro  rata basis
as is practicable (subject to the procedures of the Depository), unless such
method is prohibited.  The Trustee shall
make the selection from the Notes outstanding and not previously called for
redemption and shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof, to be redeemed.  Notes in denominations of $1,000 in
principal amount may be redeemed only in whole.  The Trustee may select for redemption portions (equal to $1,000
in principal amount or any integral multiple thereof) of the principal of Notes
that have denominations larger than $1,000. 
Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.


 


32

















 


SECTION 3.03.  Notice of Redemption.


 


At least thirty (30) days
but not more than sixty (60) days before a Redemption Date, the Company shall
mail or cause to be mailed a notice of redemption by first class mail, postage
prepaid, to each Holder whose Notes are to be redeemed at its registered address,
with a copy to the Trustee and any Paying Agent.  At the Company’s written request, the Trustee shall give the
notice of redemption in the Company’s name and at the Company’s expense.  Failure to give Notice of redemption, or any
defect therein to any Holder of any Note selected for redemption shall not
impair or affect the validity of the redemption of any other Note.


 


Each notice of redemption
shall identify the Notes to be redeemed and shall state:


 


(1)                                  the Redemption Date;


 


(2)                                  the Redemption Price and the amount of
accrued interest, if any, to be paid;


 


(3)                                  the name and address of the Paying Agent;


 


(4)                                  the CUSIP number;


 


(5)                                  the subparagraph of the Notes pursuant to
which such redemption is being made;


 


(6)                                  the place where such Notes called for
redemption must be surrendered to the Paying Agent to collect the Redemption
Price plus accrued interest, if any;


 


(7)                                  that, unless the Company fails to deposit
with the Paying Agent funds in satisfaction of the applicable Redemption Price
plus accrued interest, if any, interest on Notes called for redemption ceases
to accrue on and after the Redemption Date in accordance with Section 3.05,
and the only remaining right of the Holders of such Notes is to receive payment
of the Redemption Price plus accrued interest, if any, upon surrender to the
Paying Agent of the Notes redeemed;


 


(8)                                  if any Note is being redeemed in part,
the portion of the principal amount of such Note to be redeemed and that, after
the Redemption Date, and upon surrender of such Note, a new Note or Notes in
the aggregate principal amount equal to the unredeemed portion thereof shall be
issued; and


 


(9)                                  if fewer than all the Notes are to be
redeemed, the identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be redeemed and
the aggregate principal amount of Notes to be outstanding after such partial
redemption.


 


If any of the
Notes to be redeemed is in the form of a Global Note, then the Company shall
modify such notice to the extent necessary to accord with the procedures of the
Depository applicable to redemption.


 


SECTION 3.04.  Effect of Notice of Redemption.


 


Once notice of redemption is
mailed in accordance with Section 3.03, Notes or portions thereof
called for redemption shall become irrevocably due and payable on the
Redemption Date and at the Redemption Price plus accrued interest, if any.  Upon surrender to the Trustee or Paying
Agent, such


 


33

















 


Notes
or portions thereof called for redemption shall be paid at the Redemption Price
plus accrued interest thereon, if any, to the Redemption Date, but installments
of interest the maturity of which is on or prior to the Redemption Date shall
be payable to Holders of record at the close of business on the relevant Record
Dates referred to in the Notes.


 


SECTION 3.05.  Deposit of Redemption Price.


 


Not later than 10:00 a.m.
local time in the place of payment on the Redemption Date, the Company shall
deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
Redemption Price plus accrued interest, if any, of all Notes or portions
thereof to be redeemed on that date.


 


The Paying Agent shall
promptly return to the Company any U.S. Legal Tender so deposited which is not
required for that purpose, except with respect to monies owed as obligations to
the Trustee pursuant to Article Seven.


 


If the Company complies with
the preceding paragraph, then, unless the Company defaults in the payment of
such Redemption Price plus accrued interest, if any, interest on the Notes or
portions thereof to be redeemed shall cease to accrue on and after the
applicable Redemption Date, whether or not such Notes are presented for
payment.


 


SECTION 3.06.  Notes Redeemed in Part.


 


Upon surrender of a Note
that is to be redeemed in part, the Company shall issue and the Trustee shall
authenticate for the Holder at the expense of the Company a new Note or Notes
equal in principal amount to the unredeemed portion of the Note surrendered.


 


ARTICLE FOUR


 


COVENANTS


 


SECTION 4.01.  Payment of Notes.


 


The Company shall pay the
principal of, or premium, if any, or interest on the Notes on the dates and in
the manner provided in the Notes and in this Indenture.  An installment of principal of, or premium,
if any, or interest on the Notes shall be considered paid on the date it is due
if the Trustee or Paying Agent (other than the Company or an Affiliate of the
Company) holds on that date U.S. Legal Tender designated for and sufficient to
pay the installment in full.


 


Notwithstanding anything to
the contrary contained in this Indenture, the Company may, to the extent it is
required to do so by law, deduct or withhold income or other similar taxes
imposed by the United States from principal or interest payments hereunder.


 


SECTION 4.02.  Maintenance of Office or Agency.


 


The Company shall maintain
the office or agency required under Section 2.03.  The Company shall give prior written notice
to the Trustee of the location, and any change in the location, of such office
or agency.  If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.


 


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SECTION 4.03.  Corporate Existence.


 


Except as otherwise permitted
by Article Five, the Company shall do or cause to be done, at its
own cost and expense, all things necessary to preserve and keep in full force
and effect its corporate existence and the corporate existence of each of its
Restricted Subsidiaries in accordance with the respective organizational
documents of each such Restricted Subsidiary and the material rights (charter
and statutory) and franchises of the Company and each such Restricted
Subsidiary; provided, however, that the Company shall not be
required to preserve, with respect to itself, any material right or franchise
and, with respect to any of its Restricted Subsidiaries, any such existence,
material right or franchise, if the Board of Directors of the Company, shall
determine in good faith that the preservation thereof is no longer desirable in
the conduct of the business of the Company and its Restricted Subsidiaries,
taken as a whole.


 


SECTION 4.04.  Payment of Taxes and Other Claims.


 


The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to
taxes) levied or imposed upon it or any of its Restricted Subsidiaries or its
properties or any of its Restricted Subsidiaries’ properties and (ii) all
material lawful claims for labor, materials and supplies that, if unpaid, might
by law become a Lien upon its properties or any of its Restricted Subsidiaries’
properties; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being or
shall be contested in good faith by appropriate proceedings properly instituted
and diligently conducted for which adequate reserves, to the extent required
under GAAP, have been taken.


 


SECTION 4.05.  Maintenance of Properties and
Insurance.


 


(a)                                  The Company shall, and shall cause each
of its Restricted Subsidiaries to, maintain its properties in good working
order and condition in all material respects (subject to ordinary wear and
tear), and make all necessary repairs, renewals, replacements, additions,
betterments and improvements thereto and actively conduct and carry on its
business; provided, however, that nothing in this Section 4.05
shall prevent the Company or any of its Restricted Subsidiaries from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the good faith judgment of the Board of Directors or
other governing body of the Company or the Restricted Subsidiary concerned, as
the case may be, desirable in the conduct of its businesses and is not
disadvantageous in any material respect to the Holders.


 


(b)                                 The Company shall maintain insurance
(including appropriate self-insurance) against loss or damage of the kinds
that, in the good faith judgment of the Company, are adequate and appropriate
for the conduct of the business of the Company and its Restricted Subsidiaries
in a prudent manner, with reputable insurers or with the government of the
United States or an agency or instrumentality thereof, in such amounts, with
such deductibles, and by such methods as shall be customary, in the good faith
judgment of the Company, for companies similarly situated in the industry.


 


SECTION 4.06.  Compliance Certificate; Notice of
Default.


 


(a)                                  The Company shall deliver to the Trustee,
within ninety (90) days after the end of the Company’s fiscal year, an Officers’
Certificate stating that a review of the activities of the Company and its
Restricted Subsidiaries during the preceding fiscal year has been made under
the supervision of the signing Officers (one of whom is the principal executive
officer, principal financial


 


35

















 


officer or principal accounting officer) with a view
to determining whether they have kept, observed, performed and fulfilled its
obligations under this Indenture and the other Indenture Documents and further
stating, as to each such Officer signing such certificate, that to the best of
such Officer’s actual knowledge the Company and its Restricted Subsidiaries
during such preceding fiscal year have kept, observed, performed and fulfilled
each and every condition and covenant under this Indenture and the other
Indenture Documents in all material respects and at the date of such
certificate there is no Default or Event of Default that has occurred and is
continuing or, if such signers do know of such Default or Event of Default, the
certificate shall describe the Default or Event of Default and its status with
particularity.


 


(b)                                 The annual financial statements delivered
pursuant to Section 4.08 shall be accompanied by a written report
of the Company’s independent accountants (who shall be a firm of established
national reputation) that in conducting their audit of such financial
statements nothing has come to their attention that would lead them to believe
that the Company has violated any provisions of Article Four or Article Five
insofar as they relate to accounting matters or, if they believe that any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.


 


(c)                                  The Company shall, so long as any Notes
are outstanding, upon any Officer of the Company becoming aware of any Default
or Event of Default, deliver to the Trustee an Officers’ Certificate specifying
such Default or Event of Default within five (5) Business Days of such Officer
becoming aware of such occurrence.


 


SECTION 4.07.  Compliance with Laws.


 


The Company shall, and shall
cause each of its Subsidiaries to, comply with all applicable statutes, rules,
regulations, orders and restrictions of the United States, all states and
municipalities thereof, and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the foregoing, in
respect of the conduct of its businesses and the ownership of its properties,
except for such noncompliances as are not in the aggregate reasonably likely to
have a material adverse effect on the financial condition or results of operations
of the Company and its Subsidiaries, taken as a whole or the ability of the
Company to perform its obligations hereunder.


 


SECTION 4.08.  Reports to Holders.


 


Whether or not required by
the rules and regulations of the Commission, so long as any Notes are
outstanding, the Company will furnish to the Trustee and, upon request, to the
Holders of Notes:


 


(1)                                  all quarterly
and annual financial information that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if the Company were required
to file such Forms, including a “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” that describes the financial
condition and results of operations of the Company and its consolidated Subsidiaries
and, with respect to the annual information only, a report thereon by the
Company’s certified independent accountants; and


 


(2)                                  all current
reports that would be required to be filed with the Commission on Form 8-K if
the Company were required to file such reports, in each case within the time
periods specified in the Commission’s rules and regulations.


 


36

















 


In addition, following the
consummation of the Exchange Offer contemplated by the Registration Rights
Agreement, whether or not required by the rules and regulations of the
Commission, the Company will file a copy of all such information and reports
with the Commission for public availability within the time periods specified
in the Commission’s rules and regulations (unless the Commission will not
accept such a filing). In addition, prior to the consummation of the Exchange
Offer, for so long as any Notes remain outstanding, the Company will furnish to
the Holders upon their request, the information required to be delivered
pursuant to Rule 144(A)(d)(4) under the Securities Act.


 


The receipt by the Trustee
of any such reports and documents pursuant to this Section 4.08 shall not
constitute notice or constructive notice of any information contained in such
documents or determinable from information contained in such documents,
including the Company’s compliance with any covenants hereunder (as to which
the Trustee is entitled to rely exclusively on an Officers’ Certificate).


 


SECTION 4.09.  Waiver of Stay, Extension
or Usury Laws.


 


The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law that would prohibit
or forgive the Company from paying all or any portion of the principal of,
premium, if any, or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.


 


SECTION 4.10.  Limitation on Restricted Payments.


 


The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly:


 


(1)                                  declare or pay any dividend or make any
distribution (other than dividends or distributions payable in Qualified
Capital Stock of the Company and dividends and distributions payable to the
Company or another Restricted Subsidiary of the Company) on or in respect of
shares of Capital Stock of the Company or its Restricted Subsidiaries to
holders of such Capital Stock;


 


(2) purchase, redeem or otherwise acquire or retire
for value any Capital Stock of the Company or its Restricted Subsidiaries or
any warrants, rights or options to purchase or acquire shares of any class of
such Capital Stock;


 


(3) make any principal payment on, purchase, defease,
redeem, prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness of the Company or any Guarantor that is subordinate
or junior in right of payment to the Notes or a Guarantee; or


 


(4)                                  make any Investment (other than Permitted
Investments);


 


(each of the foregoing
actions set forth in clauses (1), (2), (3) and (4) being referred to as a “Restricted
Payment”);


 


if at the time of such
Restricted Payment or immediately after giving effect thereto,


 


37

















 


(i)                                     a Default or an Event of Default shall
have occurred and be continuing; or


 


(ii)                                  the Company is not able to incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.12; or


 


(iii)                               the aggregate amount of Restricted
Payments (including such proposed Restricted Payment) made subsequent to the
Issue Date (the amount expended for such purposes, if other than in cash, being
the Fair Market Value of such property at the time of the making thereof) shall
exceed the sum of:


 


(A) 50% of the cumulative
Consolidated Net Income (or if cumulative Consolidated Net Income is a loss,
minus 100% of such loss) of the Company earned during the period beginning on
the first day of the first fiscal quarter after the Issue Date and ending on
the last day of the Company’s most recent fiscal quarter ending prior to the
date the Restricted Payment occurs for which financial statements are available
(the “Reference Date”) (treating such period as a single accounting
period); plus


 


(B) 100% of the aggregate
net cash proceeds received by the Company from any Person (other than a
Subsidiary of the Company) from the issuance and sale subsequent to the Issue
Date and on or prior to the Reference Date of Qualified Capital Stock of the
Company (excluding any net proceeds from an Equity Offering to the extent used
to redeem Notes pursuant to paragraph 5(b) of the Notes); plus


 


(C) without duplication
of any amounts included in clause (iii)(B) above, 100% of the aggregate net
cash proceeds of any equity contribution received by the Company from a holder
of the Company’s Capital Stock subsequent to the Issue Date and on or prior to
the Reference Date (excluding any net proceeds from any such capital contribution
to the extent used to redeem Notes pursuant to paragraph 5(b) of the Notes); plus


 


(D) 100% of the aggregate
net cash proceeds received from the issuance of Indebtedness or shares of
Disqualified Capital Stock of the Company that have been converted into or
exchanged for Qualified Capital Stock of the Company subsequent to the Issue
Date and on or prior to the Reference Date.


 


In the case of clauses
(iii)(B) and (C) above, any net cash proceeds from issuances and sales of
Qualified Capital Stock of the Company financed directly or indirectly using
funds borrowed from the Company or any Subsidiary of the Company, shall be
excluded until and to the extent such borrowing is repaid.


 


Notwithstanding the foregoing, the provisions set
forth in the immediately preceding paragraph do not prohibit:


 


(1)                                  the payment of any dividend or other
distribution or redemption within 60 days after the date of declaration of such
dividend or call for redemption if such payment would have been permitted on
the date of declaration or call for redemption;


 


(2) the acquisition of any shares of Qualified Capital
Stock of the Company, either (i) solely in exchange for other shares of
Qualified Capital Stock of the Company or (ii) through the application of net
proceeds of a sale for cash (other than to a Subsidiary of the Company) of
shares of Qualified Capital Stock of the Company within 60 days after such
sale;


 


38

















 


(3) the acquisition of any Indebtedness of the Company
or the Guarantors that is subordinate or junior in right of payment to the
Notes and Guarantees either (i) solely in exchange for shares of Qualified
Capital Stock of the Company, or (ii) through the application of net proceeds
of a sale for cash (other than to a Subsidiary of the Company) within 60 days
after such sale of (a) shares of Qualified Capital Stock of the Company or (b)
if no Default or Event of Default would exist after giving effect thereto,
Refinancing Indebtedness;


 


(4) an Investment either (i) solely in exchange for
shares of Qualified Capital Stock of the Company or (ii) through the
application of the net proceeds of a sale for cash (other than to a Subsidiary
of the Company) of shares of Qualified Capital Stock of the Company within 60
days after such sale;


 


(5) if no Default or Event of Default has occurred and
is continuing or would exist after giving effect thereto, the repurchase or
other acquisition of shares of Capital Stock of the Company from employees,
former employees, directors or former directors of the Company (or permitted
transferees of such employees, former employees, directors or former
directors), pursuant to the terms of the agreements (including employment
agreements) or plans (or amendments thereto) approved by the Board of Directors
of the Company under which such individuals purchase or sell or are granted the
option to purchase or sell, shares of such Capital Stock; provided, however, that the aggregate
amount of such repurchases and other acquisitions in any calendar year shall
not exceed the sum of (x) $500,000 and (y) the aggregate amount of Restricted
Payments permitted (but not made) pursuant to this clause (5) in prior calendar
years; provided further, however,
that such amount in any calendar year may be increased by an amount not to
exceed the net cash proceeds of key man life insurance policies received by the
Company after the Issue Date;


 


(6) ESOP Stock Repurchases if, after giving pro forma
effect to such ESOP Stock Repurchase and any Indebtedness incurred to effect
such ESOP Stock Repurchase, the Consolidated Leverage Ratio of the Company
would be less than 4.5 to 1.0; provided,
however, that the aggregate number of ESOP Shares repurchased in any
fiscal year shall not exceed 5% of the total ESOP Shares outstanding as of the
last day of the immediately preceding fiscal year;


 


(7) ESOP Stock Repurchases not otherwise permitted by
this covenant to the extent required by law; provided,
however, that any payments made pursuant to this clause (7) that in
the aggregate exceed $2.5 million shall be a Default; provided further, however, that such
Default may be cured by the sale of Qualified Capital Stock, or an equity
contribution received by the Company from a holder of the Company’s Capital
Stock, for net cash proceeds in an amount equal to the Restricted Payment made
pursuant to this clause (7) in excess of $2.5 million within 60 days of such
ESOP Stock Repurchase;


 


(8) in the event of a Change of Control, and if no
Default shall have occurred and be continuing or would exist after giving
effect thereto, the payment, purchase, redemption, defeasance or other
acquisition or retirement of Indebtedness that is subordinated to the Notes or
the Guarantees, in each case, at a purchase price not greater than 101% of the
principal amount of such Indebtedness (or, if such Indebtedness was issued with
original issue discount, 101% of the accreted value), plus any accrued and
unpaid interest thereon; provided, however,
that prior to such payment, purchase, redemption, defeasance or other
acquisition or retirement, the Company has made a Change of Control Offer with
respect to the Notes as a result of such Change of Control and has repurchased
all Notes validly tendered and not withdrawn in connection with such Change of
Control Offer;


 


(9) if no Default shall have occurred and be
continuing or would exist after giving effect thereto, the declaration or
making of a Restricted Payment by the Company for the purpose of paying
dividends on the Common Stock of the Company or any holding company of the
Company following a


 


39

















 


Public Equity Offering of
the Company or such holding company resulting in gross proceeds of at least
$30.0 million in an amount not to exceed 6% per annum of the net cash proceeds
received by the Company (including any such net cash proceeds contributed by a
holding company of the Company) from all Public Equity Offerings;


 


(10) repurchases of Capital Stock deemed to occur upon
exercise of stock options, warrants or other similar rights if such Capital
Stock represents a portion of the exercise price of such options, warrants or
other similar rights;


 


(11) payments or distributions to dissenting
stockholders of Capital Stock of the Company pursuant to applicable law,
pursuant to or in connection with a consolidation, merger or transfer of assets
that complies with the provisions of the Indenture applicable to mergers,
consolidations and transfers of all or substantially all of the property and
assets of the Company or any of its Restricted Subsidiaries;


 


(12) payments, advances or dividends to any direct or
indirect parent entity of the Company to be used by such entity solely to pay
its franchise and other taxes and reasonable directors’ fees and other fees and
expenses owing by it in the ordinary course of business in an aggregate amount
not to exceed $500,000 in any fiscal year, to the extent actually used by such
entity to pay such taxes, fees and expenses;


 


(13) the application of the proceeds from the issuance
of the Notes on the Issue Date as described under “Use of Proceeds” in the
Offering Circular;


 


(14) payments to any direct or indirect parent entity
of the Company to be used by such entity solely to pay federal, state and local
income taxes; provided, however,
such payments shall be made no earlier than thirty days prior to the date on
which such entity is required to make such payment and shall not exceed the
aggregate tax liability of the Company and its Restricted Subsidiaries for such
calendar year determined for this purpose as if the Company and its Restricted
Subsidiaries were a separate affiliated group (as defined in Section 1504
of the Internal Revenue Code of 1986, as amended) filing a consolidated return,
or, to the extent applicable, a separate group filing combined or unitary
returns, and then only to the extent that any such payments are actually paid
by such entity to governmental entities (after taking into account the tax
attributes of members of any actual consolidated, combined or unitary returns that
include the Company and any Restricted Subsidiaries and the application of
refunds or credits of overpayments of Taxes made in previous calendar years);
and


 


(15) if no Default shall have occurred and be
continuing or would exist after giving effect thereto, other Restricted
Payments not to exceed $5.0 million in the aggregate since the Issue Date.


 


In determining the aggregate amount of Restricted
Payments made subsequent to the Issue Date in accordance with clause (iii) of
the first paragraph of this Section 4.10, amounts expended pursuant to
clauses (1), (2)(ii), 3(ii)(a), (4)(ii), (6), (7), (9) and (15) shall be
included in such calculation.


 


If the Company makes a Restricted Payment that, at the
time of the making of such Restricted Payment, would in the good faith
determination of the Company be permitted under the requirements of this
covenant, such Restricted Payment will be deemed to have been made in
compliance with this covenant notwithstanding any subsequent adjustments made
in good faith to the Company’s financial statements for any period which
adjustments affect any of the financial data used to make the calculations with
respect to such Restricted Payment.


 


40

















 


Not later than the date of making any Restricted
Payment, the Company shall deliver to the Trustee an Officers’ Certificate
stating that such Restricted Payment complies with the Indenture and setting
forth in reasonable detail the basis upon which the required calculations were
computed, which calculations may be based upon the Company’s latest available
internal quarterly financial statements.


 


SECTION 4.11.  Limitation on Transactions with
Affiliates.


 


(a)                                  The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, enter into or
permit to exist any transaction or series of related transactions (including,
without limitation, the purchase, sale, lease or exchange of any property or
the rendering of any service) with, or for the benefit of, any of its
Affiliates (each an “Affiliate Transaction”), other than (x) Affiliate
Transactions permitted under paragraph (b) below and (y) Affiliate Transactions
on terms that are no less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm’s-length basis from
a Person that is not an Affiliate of the Company or such Restricted Subsidiary.


 


Except with respect to
paragraph (b) below, with respect to all Affiliate Transactions, the Company
shall deliver an Officers’ Certificate to the Trustee certifying that such
transactions are in compliance with clause (a)(y) of the preceding paragraph.
All Affiliate Transactions (and each series of related Affiliate Transactions
which are similar or part of a common plan) involving aggregate payments or
other property with a Fair Market Value in excess of $3.0 million shall be
approved by a majority of the members of the Board of Directors of the Company
(including a majority of the disinterested members thereof), such approval to
be evidenced by a Board Resolution stating that such Board of Directors has
determined that such transaction complies with the foregoing provisions. If the
Company or any Restricted Subsidiary of the Company enters into an Affiliate
Transaction (or a series of related Affiliate Transactions related to a common
plan) that involves an aggregate Fair Market Value of more than $10.0 million,
the Company or such Restricted Subsidiary, as the case may be, shall, prior to
the consummation thereof, obtain a favorable opinion as to the fairness of the
financial terms of such transaction or series of related transactions to the
Company or the relevant Restricted Subsidiary, as the case may be, from an
Independent Financial Advisor and file the same with the Trustee.


 


(b)                                 The
restrictions set forth in the first paragraph of this Section 4.11
shall not apply to:


 


(1)                                  reasonable
fees and compensation paid to and indemnity provided on behalf of officers,
directors, employees or consultants of the Company or any Restricted Subsidiary
of the Company as determined in good faith by the Company’s Board of Directors
or senior management;


 


(2)                                  transactions
exclusively between or among the Company and any of its Restricted Subsidiaries
or exclusively between or among such Restricted Subsidiaries;  provided such
transactions are not otherwise prohibited by the Indenture


 


(3)                                  any agreement as in effect as of the Issue
Date (including, without limitation, the ESOP) or any transaction contemplated
thereby and any amendment thereto or replacement agreement thereto so long as
any such amendment or replacement agreement is not


 


41

















 


more disadvantageous to the Holders in any
material respect than the original agreement as in effect on the Issue Date;


 


(4)                                  Restricted
Payments permitted by this Indenture;


 


(5)                                  any merger or other transaction with an
Affiliate solely for the purpose of reincorporating the Company in another
jurisdiction or creating a holding company of the Company; and


 


(6)                                  any
employment, stock option, stock repurchase, employee benefit compensation,
business expense reimbursement, severance, termination or other
employment-related agreements, arrangements or plans entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business.


 


SECTION 4.12.  Limitation on Incurrence of
Additional Indebtedness.


 


The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, acquire, become liable, contingently or otherwise, with respect to,
or otherwise become responsible for payment of (collectively, ‘‘incur’’) any Indebtedness other than
Permitted Indebtedness; provided, however, that the Company or
any of its Restricted Subsidiaries that is or, upon such incurrence, becomes a
Guarantor may incur Indebtedness (including, without limitation, Acquired
Indebtedness) if on the date of the incurrence of such Indebtedness the
Consolidated Fixed Charge Coverage Ratio of the Company will be, after giving
effect to the incurrence thereof, greater than 2.0 to 1.0.


 


SECTION 4.13.  Limitation on Dividend and Other
Payment Restrictions Affecting Restricted Subsidiaries.


 


The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary of the Company to:


 


(1)                                  pay dividends or make any other
distributions on or in respect of its Capital Stock;


 


(2)                                  make loans or advances or to pay any
Indebtedness or other obligation owed to the Company or any other Restricted
Subsidiary of the Company; or


 


(3)                                  transfer any of its property or assets to
the Company or any other Restricted Subsidiary of the Company,


 


except for such encumbrances or restrictions existing
under or by reason of:


 


(a)                                  applicable law, rule or regulation;


 


(b)                                 the Indenture;


 


(c) customary non-assignment provisions of any lease
of any Restricted Subsidiary of the Company to the extent such provisions
restrict the transfer of the lease or the property leased thereunder;


 


42

















 


(d) any instrument governing Acquired Indebtedness,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the properties or
assets of the Person so acquired;


 


(e) the Credit Agreement and the Collateral
Agreements;


 


(f) agreements existing on the Issue Date to the
extent and in the manner such agreements are in effect on the Issue Date;


 


(g) restrictions on the transfer of assets subject to
any Lien permitted under the Indenture;


 


(h) restrictions imposed by any agreement to sell
assets or Capital Stock permitted under the Indenture to any Person pending the
closing of such sale;


 


(i) provisions in joint venture agreements and other
similar agreements (in each case relating solely to the respective joint
venture or similar entity or the equity interests therein) entered into in the
ordinary course of business;


 


(j) restrictions contained in the terms of the
Purchase Money Indebtedness or Capitalized Lease Obligations not incurred in
violation of the Indenture; provided,
that such restrictions relate only to the assets financed with such
Indebtedness;


 


(k) restrictions in other Indebtedness incurred in
compliance with Section 4.12; provided that
such restrictions, taken as a whole, are, in the good faith judgment of the
Company’s Board of Directors, no more materially restrictive with respect to
such encumbrances and restrictions than those contained in the existing
agreements referenced in clauses (b), (e) and (f) above;


 


(l) restrictions on cash or other deposits imposed by
customers under contracts or other arrangements entered into or agreed to in
the ordinary course of business;


 


(m) restrictions on the ability of any Foreign
Restricted Subsidiary to make dividends or other distributions resulting from
the operation of covenants contained in documentation governing Indebtedness of
such Subsidiary permitted under the Indenture; or


 


(n) an agreement governing Indebtedness incurred to
Refinance the Indebtedness issued, assumed or incurred pursuant to an agreement
referred to in clause (b), (d), (f), (j) or (k) above; provided, however, that the provisions
relating to such encumbrance or restriction contained in any such Indebtedness
are no less favorable to the Company in any material respect as determined by
the Board of Directors of the Company in their reasonable and good faith
judgment than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (b), (d), (f), (j) or (k).


 


SECTION 4.14.  Additional Subsidiary
Guarantees and Collateral Agreements.


 


If the Company or any of its Restricted Subsidiaries
transfers or causes to be transferred, in one transaction or a series of
related transactions, any property to any Person that is not a Guarantor but
becomes a Domestic Restricted Subsidiary as a result of such transaction or if
the Company or any of its Restricted Subsidiaries shall organize, acquire or
otherwise invest in another Person that is or becomes a Domestic Restricted
Subsidiary that is not a Guarantor, then the Company shall cause such Domestic
Restricted Subsidiary that is not a Guarantor to:


 


43

















 


(1)                                  execute and deliver to the Trustee a
supplemental indenture in form reasonably satisfactory to the Trustee pursuant
to which such Domestic Restricted Subsidiary shall unconditionally guarantee on
a senior secured basis all of the Company’s obligations under the Notes and
this Indenture on the terms set forth herein;


 


(2)(a)execute and deliver to the Collateral Agent such
amendments to the Collateral Agreements as the Collateral Agent deems necessary
or advisable in order to grant to the Collateral Agent, for the benefit of the
Holders and the Lenders, a perfected security interest in the Capital Stock of
such new Domestic Restricted Subsidiary and any debt securities of such new
Domestic Restricted Subsidiary, subject to the Permitted Liens, which are owned
by the Company or such new Domestic Restricted Subsidiary and required to be
pledged pursuant to the Security Agreement, (b) deliver to the Collateral Agent
any certificates representing such Capital Stock and debt securities, together
with (i) in the case of such Capital Stock, undated stock powers or instruments
of transfer, as applicable, endorsed in blank, and (ii) in the case of such
debt securities, endorsed in blank, in each case executed and delivered by an
Officer of the Company or such Subsidiary, as the case may be;


 


(3) take such actions necessary or as the Collateral
Agent reasonably determines to be advisable to grant to the Collateral Agent for
the benefit of the Holders a perfected security interest in the assets of such
new Domestic Restricted Subsidiary, subject to Permitted Liens, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Security Agreement or by law or as may be reasonably
requested by the Collateral Agent;


 


(4) take such further action and execute and deliver
such other documents specified in the Indenture or otherwise reasonably
requested by the Trustee or the Collateral Agent to effectuate the foregoing;
and


 


(5) deliver to the Trustee an Opinion of Counsel that
such supplemental indenture and any other documents required to be delivered
have been duly authorized, executed and delivered by such Domestic Restricted
Subsidiary and constitute legal, valid, binding and enforceable obligations of
such Domestic Restricted Subsidiary and such other opinions regarding the
perfection of such Liens in the assets of such Domestic Restricted Subsidiary
as provided for in the Indenture.


 


Thereafter, such Domestic
Restricted Subsidiary shall be a Guarantor for all purposes of the Indenture.


 


SECTION 4.15.  Limitation on Change of Control.


 


(a)                                  Upon the occurrence of a Change of
Control, the Company shall make an offer to purchase all outstanding Notes
pursuant to the requirements described in clause (b) below (the “Change
of Control Offer”) at a purchase price equal to 101% of the principal
amount thereof on the date of purchase plus accrued and unpaid interest and
Additional Interest, if any, to the date of purchase.


 


(b)                                 Within thirty (30) days following the
date upon which the Change of Control occurred, the Company shall send, by
first class mail, postage prepaid, a notice to each record Holder as shown on
the register of Holders, with a copy to the Trustee, which notice shall govern
the terms of the Change of Control Offer. 
The notice to the Holders shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Change of
Control Offer.  Such notice shall state:


 


(1)                                  that the Change of Control Offer is being
made pursuant to this Section 4.15 and that, to the extent lawful,
all Notes tendered and not withdrawn shall be accepted for payment;


 


44

















 


(2)                                  the purchase price (including the amount
of accrued interest, if any) and the purchase date (which shall be no earlier
than thirty (30) days nor later than sixty (60) days from the date such notice
is mailed, other than as may be required by law) (the “Change of Control
Payment Date”);


 


(3)                                  that any Note not tendered shall continue
to accrue interest;


 


(4)                                  that, unless the Company defaults in
making payment therefor, any Note accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Payment Date;


 


(5)                                  that Holders electing to have a Note
purchased pursuant to a Change of Control Offer shall be required to surrender
the Note, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Note completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day prior to
the Change of Control Payment Date;


 


(6)                                  that Holders shall be entitled to
withdraw their election if the Paying Agent receives, not later than five (5)
Business Days prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes the Holder delivered for purchase and a statement
that such Holder is withdrawing its election to have such Notes purchased;


 


(7)                                  that Holders whose Notes are purchased
only in part shall be issued new Notes in a principal amount equal to the
unpurchased portion of the Notes surrendered; provided  that each
Note purchased and each new Note issued shall be in an original principal
amount of $1,000 or integral multiples thereof; and


 


(8)                                  the circumstances and relevant facts
regarding such Change of Control.


 


If any of the
Notes subject to the Change of Control Offer is in the form of a Global Note,
then the Company shall modify such notice to the extent necessary to comply
with the procedures of the Depositary applicable to repurchases.


 


On or before the Change of
Control Payment Date, the Company shall, to the extent lawful (i) accept
for payment Notes or portions thereof properly tendered pursuant to the Change
of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Notes or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an Officers’
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company.  The
Paying Agent shall promptly mail to the Holders of Notes so tendered the
purchase price for such Notes and the Company shall promptly issue and the
Trustee shall promptly (but in any case not later than five days after the
Change of Control Payment Date) authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered; provided  that
each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof.  Any Notes not so
accepted shall be promptly mailed by the Company to the Holders thereof.  For purposes of this Section 4.15,
the Trustee shall act as the Paying Agent.


 


Any amounts remaining after
the purchase of Notes pursuant to a Change of Control Offer shall be returned
by the Trustee to the Company.


 


45

















 


The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes pursuant
to a Change of Control Offer.  To the
extent the provisions of any securities laws or regulations conflict with the
provisions under this Section 4.15, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.15 by virtue thereof.


 


The Company shall not be
required to make a Change of Control Offer upon a Change of Control if a third
party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements of this Section 4.15
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.


 


SECTION 4.16.  Limitation on Asset Sales.  The Company will not, and will not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless:


 


(1)                                  the Company or the applicable Restricted
Subsidiary, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the assets sold or
otherwise disposed of (as determined in good faith by the Company’s Board of
Directors);


 


(2)                                  at least 75% of the consideration
received by the Company or the Restricted Subsidiary, as the case may be, from
such Asset Sale shall be in the form of cash or Cash Equivalents and is
received at the time of such disposition; provided  that the
amount of any liabilities (as shown on the most recent applicable balance
sheet) of the Company or such Restricted Subsidiary (other than liabilities
that are by their terms subordinated to the Notes) that are assumed by the
transferee of any such assets shall be deemed to be cash for purposes of this
provision so long as the documents governing such liabilities provide that
there is no further recourse to the Company or any of its Subsidiaries with
respect to such liabilities; and


 


(3)                                  the Company shall apply, or cause such
Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset
Sale within 360 days of receipt thereof to either:


 


(a)                                  to the extent that the assets and
property sold pursuant to such Asset Sale do not constitute Priority
Collateral, to repay Indebtedness under the Credit Agreement and permanently
reduce the commitments thereunder;


 


(b)                                 to make an investment in properties and
assets that replace the properties and/or assets that were the subject of such
Asset Sale or in long-term properties and/or assets that are or will be used in
the business (including expenditures for maintenance, repair or improvement of
existing long-term properties and/or assets) of the Company and its Restricted
Subsidiaries as existing on the Issue Date or in businesses reasonably related
thereto (“Replacement Assets”); or


 


(c)                                  a combination of prepayment and
investment permitted by the foregoing clauses (3)(a) and (3)(b).


 


Pending the final
application of Net Cash Proceeds, the Company may temporarily reduce revolving
credit borrowings (and may reborrow amounts thereunder) or invest such Net Cash
Proceeds in Cash Equivalents.  On the
361st day after an Asset Sale or such earlier date, if any, as the Board of
Directors of the Company or of such Restricted Subsidiary determines not to
apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses
(3)(a), (3)(b) or (3)(c) of the preceding paragraph (each, a “Net Proceeds
Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have
not been applied on or before such Net Proceeds Offer Trigger Date as permitted
in clauses


 


46

















 


(3)(a), (3)(b) or (3)(c) of the preceding paragraph
(each a “Net Proceeds Offer Amount”) shall be applied by the Company or
such Restricted Subsidiary to make an offer to purchase (the “Net Proceeds
Offer”) on a date (the “Net Proceeds Offer Payment Date”) not more
than 45 days following the applicable Net Proceeds Offer Trigger Date, from all
Holders and all holders of other Applicable Indebtedness containing provisions
similar to those set forth in this Section 4.16 on a pro rata basis, the maximum principal
amount of Notes and such other Applicable Indebtedness that may be purchased
with the Net Proceeds Offer Amount at a price equal to 100% of the principal
amount thereof (or if such Indebtedness was issued with original issue
discount, 100% of the accreted value), plus accrued and unpaid interest and
Additional Interest thereon, if any, to the date of purchase; provided, however, that if at any time any
non-cash consideration received by the Company or any Restricted Subsidiary of
the Company, as the case may be, in connection with any Asset Sale is converted
into or sold or otherwise disposed of for cash (other than interest received
with respect to any such non-cash consideration), then such conversion or
disposition shall be deemed to constitute an Asset Sale hereunder on the date
of such conversion or disposition, as the case my be, and the Net Cash Proceeds
thereof shall be applied in accordance with this Section 4.16.


 


The Company may defer any
Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer
Amount equal to or in excess of $10.0 million resulting from one or more Asset
Sales in which case the accumulation of such amount shall constitute a Net
Proceeds Offer Trigger Date (at which time, the entire unutilized Net Proceeds
Offer Amount, and not just the amount in excess of $10.0 million, shall be
applied as required pursuant to this Section 4.16).  Upon completion of each Net Proceeds Offer,
the Net Proceeds Offer Amount will be reset at zero.


 


In the event of the
transfer of substantially all (but not all) of the property and assets of the
Company and its Restricted Subsidiaries as an entirety to a Person in a
transaction permitted under Section 5.01, which transaction does
not constitute a Change of Control, the successor corporation shall be deemed
to have sold the properties and assets of the Company and its Restricted
Subsidiaries not so transferred for purposes of this Section 4.16,
and shall comply with the provisions of this Section 4.16 with
respect to such deemed sale as if it constituted an Asset Sale. In addition,
the Fair Market Value of such properties and assets of the Company or its
Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash
Proceeds for purposes of this Section 4.16.


 


To the extent that the
aggregate principal amount of Notes tendered pursuant to such Net Proceeds
Offer is less than the Net Proceeds Offer Amount the Company and its Restricted
Subsidiaries may use such deficiency for general corporate purposes.


 


Each notice of a Net
Proceeds Offer shall be mailed to the record Holders as shown on the register
of Holders within 20 days following the Net Proceeds Offer Trigger Date, with a
copy to the Trustee, and shall comply with the procedures set forth in this
Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect
to tender their Notes in whole or in part in integral multiples of $1,000 in
principal amount in exchange for cash. To the extent Holders properly tender
Notes in an amount exceeding the Net Proceeds Offer Amount, Notes of tendering
Holders will be purchased on a pro rata basis (based on amounts tendered). A
Net Proceeds Offer shall remain open for a period of 20 Business Days or such
longer period as may be required by law.


 


The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes pursuant
to a Net Proceeds Offer. To the extent that the provisions of any securities
laws or regulations conflict with this Section 4.16, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.16
by virtue of such compliance.


 


47

















 


SECTION 4.17.  Impairment of Security Interest.


 


Subject to the Intercreditor Agreement, neither the
Company nor any of its Restricted Subsidiaries will take or omit to take any
action that would adversely affect or impair in any material respect the Liens
in favor of the Collateral Agent with respect to the Collateral.  Neither the Company nor any of its Domestic
Restricted Subsidiaries shall grant to any Person (other than the Collateral
Agent), or permit any Person (other than the Collateral Agent), to retain any
interest whatsoever in the Collateral other than Permitted Liens. Neither the
Company nor any of its Restricted Subsidiaries will enter into any agreement
that requires the proceeds received from any sale of Collateral to be applied
to repay, redeem, defease or otherwise acquire or retire any Indebtedness of
any Person, other than as permitted by the Indenture, the Notes, the Credit
Agreement, the Intercreditor Agreement and the Collateral Agreements. The
Company shall, and shall cause each Guarantor to, at their sole cost and
expense, execute and deliver all such agreements and instruments as the
Collateral Agent or the Trustee shall reasonably request to more fully or
accurately describe the property intended to be Collateral or the obligations
intended to be secured by the Collateral Agreements. The Company shall, and
shall cause each Guarantor to, at their sole cost and expense, file any such
notice filings or other agreements or instruments as may be reasonably
necessary or desirable under applicable law to perfect the Liens created by the
Collateral Agreements at such times and at such places as the Collateral Agent
or the Trustee may reasonably request.


 


SECTION 4.18.  Limitation on Liens.


 


The Company will not, and
will not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume or permit or suffer to exist any Liens (other
than Permitted Liens) of any kind against or upon any property or assets of the
Company or any of its Restricted Subsidiaries whether owned on the Issue Date
or acquired after the Issue Date, or any proceeds therefrom, or assign or
otherwise convey any right to receive income or profits therefrom.


 


SECTION 4.19.  Conduct of Business.


 


The Company and its
Restricted Subsidiaries will not engage in any businesses that are not the
same, similar or reasonably related to the businesses in which the Company and
its Restricted Subsidiaries are engaged on the Issue Date.


 


SECTION 4.20.  Limitation on Issuances and Sales
of Capital Stock of Subsidiaries.


 


The Company will not permit or cause any of its
Restricted Subsidiaries to issue or sell any Capital Stock (other than to the
Company or to a Wholly-Owned Restricted Subsidiary of the Company) or permit
any Person (other than the Company or a Wholly-Owned Restricted Subsidiary of
the Company) to own or hold any Capital Stock of any Restricted Subsidiary of
the Company or any Lien or security interest therein (other than as required by
applicable law and other than Permitted Liens); provided, however, that this provision shall not prohibit
(1) any issuance or sale if, immediately after giving effect thereto, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and
any Investment in such Person remaining after giving effect to such issuance or
sale would have been permitted to be made under Section 4.10 if made on
the date of such issuance or sale or (2) the sale of all of the Capital Stock
of a Restricted Subsidiary in compliance with the provisions of
Section 4.16.


 


SECTION 4.21.  Real Estate Mortgages and Recordings.


 


With respect to any fee interest in any real property
(individually and collectively, the “Premises”)
(a) owned by the Company or a Domestic Restricted Subsidiary on the Issue Date
or (b) acquired by the Company or a Domestic Restricted Subsidiary after the
Issue Date, with (i) a purchase


 


48

















 


price or (ii) as of the
Issue Date, with a Fair Market Value, of greater than $1,000,000, on the Issue
Date in the case of clause (a) and within 90 days of the acquisition thereof in
the case of clause (b):


 


(1)                                  the Company shall deliver to the
Collateral Agent, as mortgagee, fully executed counterparts of Mortgages, each
dated as of the Issue Date or the date of acquisition of such property, as the
case may be, duly executed by the Company or the applicable Domestic Restricted
Subsidiary, together with evidence of the completion (or satisfactory
arrangements for the completion), of all recordings and filings of such
Mortgage as may be necessary to create a valid, perfected Lien, subject to
Permitted Liens, against the properties purported to be covered thereby;


 


(2) the Company shall deliver to the Collateral Agent
mortgagee’s title insurance policies in favor of the Collateral Agent, as
mortgagee for the ratable benefit of the Collateral Agent, the Trustee and the
Holders in an amount equal to 100% of the Fair Market Value of the Premises
purported to be covered by the related Mortgage, insuring that title to such
property is marketable and that the interests created by the Mortgage
constitute valid Liens thereon free and clear of all Liens, defects and
encumbrances other than Permitted Liens, and such policies shall also include,
to the extent available, a revolving credit endorsement and such other endorsements
as the Collateral Agent shall reasonably request and shall be accompanied by
evidence of the payment in full of all premiums thereon; and


 


(3) the Company shall deliver to the Collateral Agent,
with respect to each of the covered Premises, the most recent survey of such
Premises, together with either (i) an updated survey certification in favor of
the Trustee and the Collateral Agent from the applicable surveyor stating that,
based on a visual inspection of the property and the knowledge of the surveyor,
there has been no change in the facts depicted in the survey or (ii) an
affidavit from the Company and the Guarantors stating that there has been no
change, other than, in each case, changes that do not materially adversely
affect the use by the Company or Guarantor, as applicable, of such Premises for
the Company or such Guarantor’s business as so conducted, or intended to be
conducted, at such Premises.


 


SECTION 4.22.  Leasehold Mortgages and Filings.  To the extent delivered to the Agent for the
benefit of itself and the Lenders under the Credit Agreement, the Company and
each of its Domestic Restricted Subsidiaries shall deliver to the Collateral
Agent, as mortgagee, Mortgages with respect to the Company’s leasehold
interests in the premises (the “Leased
Premises”) occupied by the Company or such Domestic Restricted
Subsidiary pursuant to leases entered into after the Issue Date.


 


SECTION 4.23.  Payments For Consent.  The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to
be paid any consideration to or for the benefit of any Holder for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture, the Notes, the Registration Rights Agreement, any
Collateral Agreement or the Intercreditor Agreement unless such consideration
is offered to be paid or is paid to all Holders that consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.


 


ARTICLE FIVE


 


SUCCESSOR CORPORATION


 


SECTION 5.01.  Merger, Consolidation and Sale of
Assets.


 


(a)  The Company will not, in a single
transaction or series of related transactions, consolidate or merge with or
into any Person, or sell, assign, transfer,


 


49

















 


lease, convey or otherwise
dispose of (or cause or permit any Restricted Subsidiary of the Company to
sell, assign, transfer, lease, convey or otherwise dispose of) all or
substantially all of the Company’s assets (determined on a consolidated basis
for the Company and the Company’s Restricted Subsidiaries) whether as an
entirety or substantially as an entirety to any Person unless:


 


(1)                                  either:


 


(A)                              the
Company shall be the surviving or continuing corporation; or


 


(B)                                the
Person (if other than the Company) formed by such consolidation or into which
the Company is merged or the Person which acquires by sale, assignment,
transfer, lease, conveyance or other disposition the properties and assets of
the Company and of the Company’s Restricted Subsidiaries substantially as an
entirety (the “Surviving Entity”):


 


(x)                                   shall
be a corporation organized and validly existing under the laws of the United
States or any State thereof or the District of Columbia; and


 


(y)                                 shall
expressly assume, (i) by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee, the due
and punctual payment of the principal of, and premium, if any, interest on and
Additional Interest, if any, on all of the Notes and the performance of every
covenant of the Notes, this Indenture, and the Registration Rights Agreement on
the part of the Company to be performed or observed thereunder and (ii) by
amendment, supplement or other instrument (in form and substance reasonably
satisfactory to the Trustee and the Collateral Agent), executed and delivered
to the Trustee, all obligations of the Company under the Collateral Agreements,
and in connection therewith shall cause such instruments to be filed and
recorded in such jurisdictions and take such other actions as may be required
by applicable law to perfect or continue the perfection of the Lien created
under the Collateral Agreements on the Collateral owned by or transferred to the
Surviving Entity;


 


(2)                                  immediately
after giving effect to such transaction and the assumption contemplated by
clause (1)(B)(y) above (including giving effect to any Indebtedness (including
Acquired Indebtedness) incurred or anticipated to be incurred in connection
with or in respect of such transaction), the Company or such Surviving Entity,
as the case may be, shall be able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.12;


 


(3)                                  immediately
after giving effect to such transaction and the assumption contemplated by
clause (1)(B)(y) above (including, without limitation, giving effect to any
Indebtedness (including Acquired Indebtedness) incurred or anticipated to be
incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; and


 


(4)                                  the
Company or the Surviving Entity shall have delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition and, if a supplemental indenture is required in connection with
such transaction, such


 


50

















 


supplemental
indenture comply with the applicable provisions of this Indenture and that all
conditions precedent in this Indenture relating to such transaction have been
satisfied.


 


For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.


 


(b)  Each
Guarantor (other than any Guarantor whose Guarantee is to be released in
accordance with the terms of the Guarantee and the Indenture in connection with
any transaction complying with the provisions of this Section 5.01 and
Section 4.16) will not, and the Company will not cause or permit any
Guarantor to, consolidate with or merge with or into any Person, other than the
Company or any other Guarantor unless:


 


(1) the entity formed by or surviving any such consolidation or merger
(if other than the Guarantor) or to which such sale, lease, conveyance or other
disposition shall have been made is a corporation organized and existing under
the laws of the United States or any State thereof or the District of Columbia;


 


(2) such entity assumes (A) by supplemental indenture (in form and
substance reasonably satisfactory to the Trustee), executed and delivered to
the Trustee, all of the obligations of the Guarantor under the Guarantee and
the performance of every covenant of the Guarantee, the Indenture and the
Registration Rights Agreement and (B) by amendment, supplement or other
instrument (in form and substance satisfactory to the Trustee and the
Collateral Agent) executed and delivered to the Trustee and the Collateral
Agent, all obligations of the Guarantor under the Collateral Agreements and in
connection therewith shall cause such instruments to be filed and recorded in
such jurisdictions and take such other actions as may be required by applicable
law to perfect or continue the perfection of the Lien created under the
Collateral Agreements on the Collateral owned by or transferred to the
surviving entity;


 


(3) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and


 


(4) immediately after giving effect to such transaction and the use of
any net proceeds therefrom on a pro forma basis, the Company could satisfy the
provisions of Section 5.01(a)(2).


 


(c)  Any merger
or consolidation of (i) a Guarantor with and into the Company (with the Company
being the surviving entity) or another Guarantor or (ii) a Guarantor or the
Company with an Affiliate organized solely for the purpose of reincorporating
such Guarantor or the Company in another jurisdiction in the United States or
any state thereof or the District of Columbia or creating a holding company of
the Company need only comply with:


 


(1) clause (4) of the first paragraph of this
covenant; and


 


(2) (x) in the case of a merger or consolidation
involving the Company as described in clause (ii),
Section 5.01(a)(1)(B)(y) and (y) in the case of a merger or consolidation
involving the Guarantor as described in clause (ii), Section 5.01(b)(2).


 


SECTION 5.02.  Successor Corporation
Substituted.  Upon any
consolidation, combination or merger or any transfer of all or substantially
all of the assets of the Company in


 


51

















 


accordance with the foregoing, in which the Company is
not the continuing corporation, the Surviving Entity formed by such
consolidation or into which the Company is merged or to which such conveyance,
lease or transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture and the
Notes with the same effect as if such surviving entity had been named as such.
Upon such substitution the Company and any Guarantors that remain Subsidiaries
of the Company shall be released from this Indenture, the Notes and the
Guarantees and the Company and the Guarantors, if surviving, shall be
automatically discharged from all of their respective obligations under this
Indenture, the Notes and the Guarantees.


 


ARTICLE SIX


 


DEFAULT AND REMEDIES


 


SECTION 6.01.  Events of Default.


 


Each of the following is an “Event of Default”:


 


(1)                                  the failure to pay interest and
Additional Interest, if any, on any Notes or any other amount (other than
principal on the Notes) when the same becomes due and payable and the default
continues for a period of thirty (30) days;


 


(2)                                  the failure to pay the principal of, or
the premium, if any, on any Notes, when such principal or premium becomes due
and payable, at maturity, upon redemption or otherwise (including the failure
to make a payment to purchase Notes tendered pursuant to a Change of Control
Offer or a Net Proceeds Offer);


 


(3)                                  a default occurs in the observance or
performance of any other covenant or agreement contained in this Indenture
(other than the payment of the principal of, or premium, if any, or interest or
Additional Interest, if any, on any Note) or any Collateral Agreement which
default continues for a period of thirty (30) days after the Company
receives written notice specifying the default (and demanding that such default
be remedied) from the Trustee or the Holders of at least 25% of the outstanding
principal amount of the Notes (except in the case of a default with respect to Section 5.01,
which will constitute an Event of Default with such notice requirement but
without such passage-of-time requirement);


 


(4)                                  the failure to pay at final maturity
(giving effect to any applicable grace periods and any extensions thereof) the
principal amount of any Indebtedness of the Company or any Restricted
Subsidiary of the Company, or the acceleration of the final stated maturity of
any such Indebtedness (which acceleration is not rescinded, annulled or
otherwise cured within 20 days from the date of acceleration) if the aggregate
principal amount of such Indebtedness, together with the principal amount of
any other such Indebtedness in default for failure to pay principal at final
maturity or which has been accelerated (in each case with respect to which the
20-day period described above has elapsed), aggregates $5.0 million or more at
any time;


 


(5)                                  one or more judgments in an aggregate
amount in excess of $5.0 million shall have been rendered against the Company
or any of its Restricted Subsidiaries (other than any judgment as to which a
reputable and solvent third-party insurer has accepted full coverage) and such
judgments remain undischarged, unpaid or unstayed for a period of 60 days after
such judgment or judgments become final and non-appealable;


 


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(6)                                  the Company or any Significant Subsidiary
(A) commences a voluntary case or proceeding under any Bankruptcy Code with
respect to itself, (B) consents to the entry of an order for relief against it
in an involuntary case under any Bankruptcy Code, (C) consents to the
appointment of a Custodian of it or for substantially all of its property, (D)
makes a general assignment for the benefit of its creditors; or (F) takes
any corporate action to authorize or effect any of the foregoing;


 


(7)                                  a court of competent jurisdiction enters
an order or decree that (A) is an order for relief in respect of the Company or
any Significant Subsidiary in an involuntary case under any Bankruptcy Code,
(B) appoints a Custodian of the Company or any Significant Subsidiary or
for substantially all of its property or (C) orders the winding-up or
liquidation of its affairs; and such order or decree shall remain unstayed and
in effect for a period of sixty (60) days;


 


(8)                                  any Collateral Agreement at any time for
any reason shall cease to be in full force and effect in all material respects,
or ceases to give the Collateral Agent the Liens, rights, powers and privileges
purported to be created thereby, superior to and prior to the rights of all
third Persons other than the holders of Permitted Liens and subject to no other
Liens except as expressly permitted by the applicable Collateral Agreement;


 


(9)                                  the Company or any of the Guarantors,
directly or indirectly, contest in any manner the effectiveness, validity,
binding nature or enforceability of any Collateral Agreement; or


 


(10)                            any Guarantee of a Guarantor that is a
Significant Subsidiary ceases to be in full force and effect or any Guarantee
of a Guarantor that is a Significant Subsidiary is declared to be null and void
and unenforceable or any Guarantee of a Guarantor that is a Significant
Subsidiary is found to be invalid or any Guarantor that is a Significant
Subsidiary denies its liability under its Guarantee (other than by reason of the
release of such Guarantor in accordance with the terms hereof).


 


SECTION 6.02.  Acceleration.


 


(a)                                  If an Event of Default (other than an
Event of Default specified in Section 6.01(6) or (7) above
with respect to the Company) shall occur and be continuing and has not been
waived, the Trustee or the Holders of at least 25% in principal amount of
outstanding Notes may declare the principal of and premium, if any, accrued
interest and Additional Interest, if any, on all the Notes to be due and
payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that it is a “notice of acceleration” (the “Acceleration
Notice”), and the same shall become immediately due and payable.


 


(b)                                 If an Event of Default specified in Section 6.01(6)
or (7) above with respect to the Company occurs and is continuing, then
all unpaid principal of, and premium, if any, and accrued and unpaid interest
and Additional Interest, if any, on all of the outstanding Notes shall ipso
facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.


 


(c)                                  At any time after a declaration of
acceleration with respect to the Notes as described in Section 6.02(a)
or (b), the Holders of a majority in principal amount of the Notes may
rescind and cancel such declaration and its consequences: (1) if the rescission
would not conflict with any judgment or decree; (2) if all existing Events of
Default have been cured or waived except nonpayment of principal, premium, if
any, interest or Additional Interest, if any, that has become due solely
because of


 


53

















 


the acceleration; (3) to the extent the payment of
such interest is lawful, interest on overdue installments of interest and
overdue principal and premium, if any, and Additional Interest, if any, that
has become due otherwise than by such declaration of acceleration, has been
paid; (4) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its reasonable expenses, disbursements and advances;
and (5) in the event of the cure or waiver of an Event of Default of the type
described in Section 6.01(6) or (7), the Trustee shall have
received an Officers’ Certificate and an Opinion of Counsel that such Event of
Default has been cured or waived.  No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.


 


SECTION 6.03.  Other Remedies.


 


If an Event of Default
occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of principal of, premium,
if any, or interest on the Notes or to enforce the performance of any provision
of the Notes, this Indenture or any Collateral Agreement.


 


The Trustee or the
Collateral Agent may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.  A delay or omission by the Trustee, the
Collateral Agent or any Holder in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. 
No remedy is exclusive of any other remedy.  All available remedies are cumulative to the extent permitted by
law.


 


SECTION 6.04.  Waiver of Past Defaults.


 


Subject to Sections 2.09, 6.07 and 9.02,
the Holders of a majority in principal amount of the Notes may waive any
existing Default or Event of Default and its consequences, except (other than
as provided in Section 6.02(c)) a default in the payment of the
principal of or premium, if any, interest or Additional Interest, if any, on
any Notes.  When a Default or Event of
Default is waived, it is cured and ceases to exist.


 


SECTION 6.05.  Control by Majority.


 


Subject to Section 2.09,
the Holders of a majority in principal amount of the outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee, including, without limitation, any remedies provided for in Section 6.03.  Subject to Section 7.01 and 7.02(f),
however, the Trustee may refuse to follow any direction (which direction, if
sent to the Trustee, shall be in writing) that the Trustee reasonably believes
conflicts with any applicable law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Holder, or that
may subject the Trustee to personal liability; provided  that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction (which direction, if sent to the Trustee,
shall be in writing).


 


SECTION 6.06.  Limitation on Suits.


 


A Holder may not pursue any
remedy with respect to this Indenture or the Notes unless:


 


(1)                                  the Holder gives to the Trustee written
notice of a continuing Event of Default;


 


54

















 


(2)                                  subject to Section 2.09,
Holders of at least 25% in principal amount of the outstanding Notes make a
written request to the Trustee to institute proceedings in respect of that
Event of Default;


 


(3)                                  such Holders offer to the Trustee
indemnity reasonably satisfactory to the Trustee against any loss, liability or
expense to be incurred in compliance with such request;


 


(4)                                  the Trustee does not comply with the
request within sixty (60) days after receipt of the request and the offer of
indemnity; and


 


(5)                                  during such sixty (60) day period the
Holders of a majority in principal amount of the outstanding Notes do not give
the Trustee a written direction which, in the opinion of the Trustee, is
inconsistent with the request.


 


A Holder may not use this
Indenture to prejudice the rights of another Holder or to obtain a preference
or priority over such other Holder.


 


SECTION 6.07.  Rights of Holders to Receive Payment.


 


Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of
principal of, premium, if any, and interest on a Note, on or after the respective
due dates expressed in such Note, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.


 


SECTION 6.08.  Collection Suit by Trustee or
Collateral Agent.


 


If an Event of Default
specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee or the Collateral Agent may recover judgment (i) in its
own name and (ii)(x) in the case of the Trustee, as trustee of an express trust
or (y) in the case of the Collateral Agent, as collateral agent on behalf of
itself, the Trustee and the Holders, in each case against the Company or any
other obligor on the Notes for the whole amount of principal of, premium, if
any, and accrued interest remaining unpaid on, the Notes, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest at the rate set forth
in Section 4.01 and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, the
Collateral Agent and their respective agents and counsel and any other amounts
due the Trustee under the Collateral Agreements and Section 7.07
hereof.


 


SECTION 6.09.  Trustee May File Proofs of Claim.


 


The Trustee is authorized to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relating to the Company or any other obligor upon the Notes, any of
their respective creditors or any of their respective property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under the Collateral Agreements and Section 7.07.  The


 


55

















 


Company’s
payment obligations under this Section 6.09 shall be secured in
accordance with the provisions of Section 7.07.  Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.


 


SECTION 6.10.  Priorities.


 


If the Trustee or the Collateral
Agent collects any money or property pursuant to this Article Six,
it shall, subject to the terms of the Intercreditor Agreement, pay out the
money in the following order:


 


First:  to the Trustee, the Collateral Agent, the
Paying Agent and the Registrar for amounts due under Section 7.07
(including payment of all compensation expense, all liabilities incurred and
all advances made by the Trustee and the costs and expenses of collection);


 


Second:  if the Holders are forced to proceed against
the Company directly without the Trustee, to Holders for their collection
costs;


 


Third:  to Holders for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the Notes
for principal, premium, if any, and interest, respectively; and


 


Fourth:  to the Company or any other obligor on the
Notes, as their interests may appear, or as a court of competent jurisdiction
may direct.


 


The Trustee, upon prior
written notice to the Company, may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.10.


 


SECTION 6.11.  Undertaking for Costs.


 


All parties to this
Indenture agree, and each Holder by its acceptance of its Note shall be deemed
to have agreed, that in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant.  This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07,
or a suit by a Holder or Holders of more than 10% in principal amount of the
outstanding Notes.


 


SECTION 6.12.  Restoration of Rights and Remedies.


 


If the Trustee or any Holder
has instituted any proceedings to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding has been instituted.


 


56

















 


ARTICLE SEVEN


 


TRUSTEE


 


SECTION 7.01.  Duties of Trustee.


 


The duties and
responsibilities of the Trustee shall be as provided by the TIA and as set
forth herein.


 


(a)                                  If an Event of Default has occurred and
is continuing, the Trustee shall exercise such rights and powers vested in it
by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.


 


(b)                                 Except during the continuance of an Event
of Default:


 


(1)                                  the duties of the Trustee shall be determined
solely by the express provisions of this Indenture and the TIA, and the Trustee
need perform only those duties as are specifically set forth in this Indenture
and no covenants or obligations shall be implied in or read into this Indenture
against the Trustee; and


 


(2)                                  in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture; provided, however,
in case of any such certificates or opinions furnished to the Trustee which by
the provisions hereof are furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.


 


(c)                                  Notwithstanding anything to the contrary
herein contained, the Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:


 


(1)                                  this paragraph does not limit the effect
of paragraph (b) of this Section 7.01;


 


(2)                                  the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and


 


(3)                                  the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05.


 


(d)                                 No provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
liability.  The Trustee shall be under
no obligation to exercise any of its rights or powers under this Indenture or
the Collateral Agreements at the request, order or direction of any Holders
unless such Holders have offered to the Trustee security and indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred by it in compliance with such request, order
or direction.


 


(e)                                  Whether or not therein expressly so
provided, every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d)
of this Section 7.01.


 


57

















 


(f)                                    The Trustee shall not be liable for
interest on any money or assets received by it except as the Trustee may agree
in writing with the Company.  Money and
assets held in trust by the Trustee need not be segregated from other funds or
assets held by the Trustee except to the extent required by law.


 


SECTION 7.02.  Rights of Trustee.


 


Subject to Section 7.01:


 


(a)                                  The Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person.  The Trustee need not
investigate any fact or matter stated in the document.


 


(b)                                 Before the Trustee acts or refrains from
acting, it may consult with counsel and may require an Officers’ Certificate or
an Opinion of Counsel, or both, which shall conform to Sections 11.04
and 11.05.  The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers’ Certificate or Opinion of Counsel.  The written advice of the Trustee’s counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by the Trustee hereunder in
good faith and in reliance thereon.


 


(c)                                  The Trustee may act through its attorneys
and agents and shall not be responsible for the misconduct or negligence of any
agent appointed with due care.


 


(d)                                 The Trustee shall not be liable for any
action that it takes or omits to take in good faith which it reasonably
believes to be authorized or within its rights or powers under this Indenture.


 


(e)                                  The Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, notice, request, direction,
consent, order, bond, debenture, or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled, upon reasonable
notice to the Company, to examine the books, records and premises of the
Company, personally or by agent or attorney. 
Except as expressly stated herein to the contrary, in no event shall the
Trustee have any responsibility to ascertain whether there has been compliance
with any of the covenants or provisions of Articles Four or Five
hereof.


 


(f)                                    The Trustee shall not be required to give
any bond or surety in respect of the performance of its powers and duties
hereunder.


 


(g)                                 Unless otherwise specifically provided in
this Indenture, any demand, request, direction or notice from the Company shall
be sufficient if signed by an Officer of the Company and any resolution of the
Board of Directors shall be sufficient if evidenced by a copy of such
resolution certified by an Officer of the Company to have been duly adopted and
in full force and effect on the date hereof.


 


(h)                                 The Trustee shall not be deemed to have
notice or be charged with knowledge of any Default or Event of Default other
than under Section 6.01(1) or 6.01(2) unless the Trustee
shall have received from the Company, any Guarantor or any other obligor upon
the Notes or from any Holder written notice thereof at its address set forth in
Section 11.02 hereof, and such notice references the Notes and this
Indenture.


 


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(i)                                     The rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation,
its right to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.


 


(j)                                     The Trustee may request that the Company
deliver an Officers’ Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant
to this Indenture, which Officers’ Certificate may be signed by any persons
authorized to sign an Officers’ Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superseded.


 


(k)                                  The permissive right of the Trustee to
take any action under this Indenture or any Collateral Agreements shall not be
construed as a duty to so act.


 


SECTION 7.03.  Individual
Rights of Trustee.


 


The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company, any Subsidiary of the Company or their
respective Affiliates with the same rights it would have if it were not
Trustee.  Any Indenture Agent may do the
same with like rights.  However, the
Trustee must comply with Sections 7.10 and 7.11, and the Trustee
is subject to TIA Sections 310(b) and 311.


 


SECTION 7.04.  Trustee’s Disclaimer.


 


The Trustee makes no
representation as to the validity, adequacy or sufficiency of this Indenture,
the Notes or the Collateral Agreements, and it shall not be accountable for the
Company’s use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Company in this Indenture, the Notes, the Collateral
Agreements or any other documents in connection with the issuance of the Notes
other than the Trustee’s certificate of authentication.


 


Beyond the exercise of
reasonable care in the custody thereof and the fulfillment of its obligations
under this Indenture and the Collateral Documents, the Trustee shall have no
duty as to any Collateral in its possession, custody or control or in the
possession, custody or control of any agent or bailee or any income thereon or
as to preservation of rights against prior parties or any other rights
pertaining thereto.  The Trustee shall
be deemed to have exercised reasonable care in the custody of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which it accords its own property.


 


The Trustee makes no
representations as to and shall not be responsible for the existence,
genuineness, value, sufficiency or condition of any of the Collateral or as to
the security afforded or intended to be afforded thereby, hereby or by any
Collateral Document, or for the validity, perfection, priority or
enforceability of the Liens or security interests in any of the Collateral
created or intended to be created by any of the Collateral Agreements, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder, except to the extent such action or omission constitutes
gross negligence or willful misconduct on the part of the Trustee, for the
validity of the title of the Company or any Guarantor to the Collateral, for
insuring the Collateral or for the payment of taxes, charges, assessments or
Liens upon the Collateral or otherwise as to the maintenance of the Collateral.


 


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SECTION 7.05.  Notice of Default.


 


If a Default or an Event of
Default occurs and is continuing and if a Trust Officer has actual knowledge or
has received written notice from the Company or any Holder, the Trustee shall
mail to each Holder, with a copy to the Company, notice of the Default or Event
of Default within thirty (30) days thereof. 
Except in the case of a Default or an Event of Default in payment of
principal of, premium, if any, or interest on, any Note, including an
accelerated payment and the failure to make payment on the Change of Control
Payment Date pursuant to a Change of Control Offer and, except in the case of a
failure to comply with Article Five, the Trustee may withhold the
notice if and so long as its Board of Directors, the executive committee of its
Board of Directors or a committee of its directors and/or Trust Officers in
good faith determines that withholding the notice is in the interest of the
Holders.


 


SECTION 7.06.  Reports by
Trustee to Holders.


 


Within sixty (60) days after
each May 15, beginning with May 15, 2004, the Trustee shall, to the extent that
any of the events described in TIA Section 313(a) occurred within the
previous twelve months, but not otherwise, mail to each Holder a brief report
dated as of such date that complies with TIA Section 313(a).  The Trustee also shall comply with TIA
Sections 313(b) and (c).


 


A copy of each report at the
time of its mailing to Holders shall be mailed to the Company and filed by the
Company with the Commission and each stock exchange or market, if any, on which
the Notes are listed or quoted.


 


The Company shall promptly
notify the Trustee if the Notes become listed or quoted on any stock exchange
or market and the Trustee shall comply with TIA Section 313(d).


 


SECTION 7.07.  Compensation and
Indemnity.


 


The Company shall pay to the
Trustee and the Registrar (each an “Indemnified Party”) from time to
time such compensation for their respective services as Trustee, Collateral
Agent, Paying Agent or Registrar, as the case may be, as shall be agreed upon
in writing signed by the Company.  The
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust.  The
Company shall reimburse each Indemnified Party upon request for all reasonable
out-of-pocket expenses incurred or made by it in connection with the
performance of its duties under, as the case may be, this Indenture, the
Collateral Agreements or the Intercreditor Agreement.  Such expenses shall include the reasonable fees and expenses of
each of such Indemnified Party’s agents and counsel.


 


The Company hereby
indemnifies each Indemnified Party for, and holds each of them harmless
against, any loss, cost, claim, liability or expense incurred by any of them
except to the extent caused by any negligence, bad faith or willful misconduct
on the part of such Indemnified Party, arising out of or in connection with
this Indenture, the Collateral Agreements or the Intercreditor Agreement, or
the administration of this trust, including the reasonable costs and expenses
of enforcing this Indenture against the Company (including this Section 7.07)
and defending themselves against any claim or liability in connection with the
exercise or performance of any of their rights, powers or duties hereunder or
thereunder (including the reasonable fees and expenses of counsel).  The Trustee shall notify the Company
promptly of any claim asserted against an Indemnified Party for which such
Indemnified Party has advised the Trustee that it may seek indemnity
hereunder.  Failure by the Trustee to so
notify the Company shall not relieve the Company of its obligations under this
paragraph except to the extent such failure has materially prejudiced the
Company.  The Company shall defend the
claim and the Indemnified Party shall cooperate in the defense; provided
that any settlement of a claim shall be approved in writing by the
Indemnified Party if such settlement would result in an admission of liability
by the Indemnified


 


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Party
or if such settlement would not be accompanied by a full release of the
Indemnified Party for all liability arising out of the events giving rise to
such claim.  The Indemnified Party may
at its option have separate counsel of its own choosing and the Company shall
pay the reasonable fees and expenses of such counsel; provided  that
the Company shall not be required to pay such fees and expenses if it assumes
the Indemnified Party’s defense and there is no conflict of interest between
the Company and the Indemnified Party in connection with such defense as
reasonably determined by the Company. 
The Company need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld.


 


To secure the Company’s
payment obligations in this Section 7.07, each Indemnified Party
shall have a lien prior to the Notes on all Collateral held or collected by the
Trustee, in its capacity as Trustee, except assets or money held in trust to
pay principal of or interest on particular Notes.


 


When an Indemnified Party
incurs expenses or renders services after an Event of Default specified in Section 6.01(6)
occurs, such expenses (including the reasonable fees and expenses of its
counsel) and the compensation for such services are intended to constitute
expenses of administration under any Bankruptcy Code.


 


The obligations of the
Company under this Section 7.07 shall survive the satisfaction and
discharge of this Indenture, termination of the Collateral Agreements or the
Intercreditor Agreement or the resignation or removal of the Trustee.


 


The Trustee shall comply
with the provisions of TIA Section 312(b)(2) to the extent applicable.


 


SECTION 7.08.  Replacement of Trustee.


 


The Trustee may resign by so
notifying the Company.  The Holders of a
majority in aggregate principal amount of the outstanding Notes may remove the
Trustee by so notifying the Company and the Trustee in writing and may appoint
a successor Trustee.  The Company, by a
Board Resolution, may remove the Trustee if:


 


(1)                                  the Trustee fails to comply with Section 7.10;


 


(2)                                  the Trustee is adjudged bankrupt or
insolvent;


 


(3)                                  a receiver or other public officer takes
charge of the Trustee or its property; or


 


(4)                                  the Trustee becomes incapable of acting
with respect to the Notes.


 


If the Trustee resigns or is
removed or if a vacancy exists in the office of Trustee for any reason, the
Company shall notify each Holder in writing of such event and shall promptly
appoint a successor Trustee.  Within one
year after the successor Trustee takes office, the Holders of a majority in
aggregate principal amount of the outstanding Notes may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.


 


A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all rights, powers, trusts, duties
and obligations of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such Trustee
so ceasing to act


 


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hereunder
subject nevertheless to its lien, if any, provided for in Section 7.07.  Upon request of the Company or the successor
Trustee, such retiring Trustee shall at the expense of the Company and upon
payment of the charges of the Trustee then unpaid, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.


 


If a successor Trustee does
not take office within thirty (30) days after the retiring Trustee resigns or
is removed, the retiring Trustee, the Company or the Holders of at least 10% in
principal amount of the outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.


 


If the Trustee fails to
comply with Section 7.10, any Holder who satisfies the requirements
of TIA Section 310(b) may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.


 


The Company shall give
notice of any resignation and any removal of the Trustee and each appointment
of a successor Trustee to all Holders in writing.  Each notice shall include the name of the successor Trustee and
the address of its Corporate Trust Office.


 


Notwithstanding any
resignation or replacement of the Trustee pursuant to this Section 7.08,
the Company’s obligations under Section 7.07 shall continue for the
benefit of the outgoing Trustee.


 


SECTION 7.09.  Successor
Trustee by Merger, Etc.


 


If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business to, another Person, the resulting, surviving or
transferee Person without any further act shall, if such resulting, surviving
or transferee Person is otherwise eligible hereunder, be the successor Trustee;
provided, however, that such Person shall be otherwise qualified
and eligible under this Article Seven.


 


In case any Notes have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.


 


SECTION 7.10.  Eligibility;
Disqualification.


 


(a)                                  This Indenture shall always have a
Trustee who satisfies the requirements of TIA Sections 310(a)(1), (2), (3) and
(5).  The Trustee (or, in the case of a
corporation included in a bank holding company system, the related bank holding
company) shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition.  In addition, if the Trustee is a corporation
included in a bank holding company system, the Trustee, independently of such
bank holding company, shall meet the capital requirements of TIA
Section 310(a)(2).  The Trustee
shall comply with TIA Section 310(b); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1)
any indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding
if the requirements for such exclusion set forth in TIA Section 310(b)(1)
are met.  The provisions of TIA
Section 310 shall apply to the Company, as obligor of the Notes.


 


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(b)                                 If the Trustee has or acquires a
conflicting interest within the meaning of the TIA, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the TIA and this Indenture.


 


SECTION 7.11.  Preferential
Collection of Claims Against
Company.


 


The Trustee shall comply
with TIA Section 311(a), excluding any creditor relationship listed in TIA
Section 311(b).  A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.


 


SECTION 7.12.  Trustee as
Collateral Agent.


 


References to the Trustee in
Sections 7.01(f), 7.02, 7.03, 7.04, and 7.07
shall include the Trustee in its role as Collateral Agent and Paying Agent.


 


SECTION 7.13.  Co-Trustees,
co-Collateral Agent and Separate
Trustees, Collateral Agent.


 


(a)                                  At any time or times, for the purpose of
meeting the legal requirements of any jurisdiction in which any of the
Collateral may at the time be located, the Company shall have the power to
appoint, and, upon the written request of the Holders of at least 25% in
principal amount of the Notes outstanding, the Company shall appoint, one or
more Persons approved by the Trustee either to act as co-trustee, jointly with
the Trustee, of all or any part of the Collateral, to act as co-collateral
agent, jointly with the Collateral Agent, or to act as separate trustees or
Collateral Agent of any such property, in either case with such powers as may
be provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power, subject
to the other provisions of this Section 7.13.  As of the Issue Date, the Company hereby
appoints U.S. Bank, National Association as the initial Collateral Agent and
U.S. Bank, National Association hereby accepts such appointment and agrees to
act and serve in such capacity.  If the
Company does not make any such subsequent appointment within fifteen (15) days
after the receipt by it of a request so to do, or in case an Event of Default
has occurred and is continuing, the Trustee shall have the power to make such
subsequent appointment.


 


(b)                                 Should any written instrument from the
Company be required by any co-trustee, co-Collateral Agent or separate trustee
or separate Collateral Agent so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Company.


 


(c)                                  Every co-trustee, co-collateral agent or
separate trustee or separate collateral agent shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:


 


(i)                                     The Notes shall be authenticated and
delivered, and all rights, powers, duties and obligations hereunder in respect
of the custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder, shall be
exercised solely, by the Trustee.


 


(ii)                                  The rights, powers, duties and
obligations hereby conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee or by the Trustee and
such co-trustee or separate trustee, or by the Collateral Agent and such
co-Collateral Agent or separate Collateral Agent, jointly as shall be provided
in the instrument appointing such co-trustee or separate trustee or
co-Collateral Agent or separate Collateral Agent, except to the


 


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extent that under any law of any jurisdiction in which
any particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee, Collateral Agent or co-Collateral Agent or separate Collateral Agent.


 


(iii)                               The Company at any time, by a Board
Resolution, may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section 7.13; provided  that,
in case an Event of Default has occurred and is continuing, the Trustee, by an
instrument in writing executed by it, shall have power to accept the
resignation of, or remove, any such co-trustee, co-collateral agent, separate
trustee or separate collateral agent. 
Upon the written request of the Company, the Trustee shall join with the
Company in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or removal.  A successor to any co-trustee, co-collateral
agent, separate trustee or separate collateral agent so resigned or removed may
be appointed in the manner provided in this Section 7.13.


 


(iv)                              No co-trustee, co-collateral agent,
separate trustee or separate collateral agent hereunder shall be personally
liable by reason of any act or omission of the Trustee or the Collateral Agent,
or any other such trustee or collateral agent hereunder.


 


(v)                                 Any act of Holders delivered to the
Trustee shall be deemed to have been delivered to each such co-trustee or
separate trustee and any act of Holders delivered to the Collateral Agent shall
be deemed to have been delivered to each such co-collateral agent or separate
collateral agent.


 


SECTION 7.14.  Form of
Documents Delivered to Trustee.


 


In any case where several
matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other Persons as to other
matters and any such Person may certify or give an opinion as to such matters
in one or several documents.


 


Any certificate or opinion
of an Officer of the Company may be based, insofar as it relates to legal
matters, upon a certificate or opinion, or representation by, counsel, unless
such Officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous.  Any such certificate or opinion of counsel
or representation by counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows
that the certificate or opinion or representations with respect to such matters
are erroneous.


 


Where any Person is required
to make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.


 


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ARTICLE EIGHT


 


SATISFACTION AND DISCHARGE OF INDENTURE


 


SECTION 8.01.  Legal
Defeasance and Covenant Defeasance.


 


(a)                                  The Company may, at its option and at any
time, elect to have either paragraph (b) or paragraph (c) below
be applied to the outstanding Notes upon compliance with the applicable
conditions set forth in paragraph (d).


 


(b)                                 Upon the Company’s exercise under paragraph
(a) of the option applicable to this paragraph (b), the Company
and the Guarantors shall be deemed to have been released and discharged from
their obligations with respect to the outstanding Notes, the Guarantees and the
Collateral Documents on the date the applicable conditions set forth below are
satisfied (hereinafter, “Legal Defeasance”).  For this purpose, such Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Notes, which shall thereafter be deemed to be “outstanding”
only for the purposes of the Sections and matters under this Indenture referred
to in (i) and (ii) below, and the Company and the Guarantors
shall be deemed to have satisfied all their other obligations under this
Indenture, the Guarantees and the Collateral Documents, except for the
following which shall survive until otherwise terminated or discharged
hereunder:  (i) the rights of
Holders of outstanding Notes to receive solely from the trust fund described in
paragraph (d) below and as more fully set forth in such paragraph
payments in respect of the principal of, and premium, if any, interest and
Additional Interest, if any, on such Notes when such payments are due, (ii) obligations
listed in Section 8.03, subject to compliance with this Section 8.01
and (iii) the rights, powers, trusts, duties and immunities of the Trustee and
the Company’s obligations in connection therewith.  The Company may exercise its option under this paragraph (b) notwithstanding the prior
exercise of its option under paragraph (c) below with respect to the
Notes.


 


(c)                                  Upon the Company’s exercise under paragraph
(a) of the option applicable to this paragraph
(c), the Company and its Restricted Subsidiaries shall be released
and discharged from their obligations under any covenant contained in Article Five,
Section 4.03 (except with respect to the corporate existence of the
Company), Sections 4.04, 4.05 and 4.08, and Sections
4.10 through 4.23 with respect to the outstanding Notes on and after
the date the conditions set forth below are satisfied (hereinafter, “Covenant
Defeasance”), and the Notes shall thereafter be deemed to be not
“outstanding” for the purpose of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed “outstanding” for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding for
accounting purposes).  For this purpose,
such Covenant Defeasance means that, with respect to the outstanding Notes, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision
herein or in any other document and such omission to comply shall not constitute
a Default or an Event of Default under Section 6.01(3) or 6.01(4),
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby.  In
addition, upon the Company’s exercise under paragraph (a) above of the
option applicable to this paragraph (c), subject to the satisfaction of
the conditions set forth in paragraph (d) below, Sections 6.01(3)
through 6.01(10) shall not constitute Events of Default.


 


(d)                                 The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above to the
outstanding Notes:


 


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(1)                                  The Company shall have irrevocably
deposited in trust with the Trustee, U.S. Legal Tender or non-callable U.S.
Government Obligations or a combination thereof, in such amounts as are
sufficient, in the opinion of a nationally-recognized firm of independent
public accountants selected by the Company, to pay the principal of, and
premium, if any, interest and Additional Interest, if any, on the outstanding
Notes on the stated dates for payment or redemption, as the case may be; provided,
however, that the Trustee (or other qualifying trustee) shall have
received an irrevocable written order from the Company instructing the Trustee
(or other qualifying trustee) to apply such U.S. Legal Tender or the proceeds
of such U.S. Government Obligations to said payments;


 


(2)                                  No Default or Event of Default shall have
occurred and be continuing on the date of such deposit pursuant to clause (1)
of this paragraph (except such Default or Event of Default resulting from the
failure to comply with Section 4.12 as a result of the borrowing of funds
required to effect such deposit) or insofar as Defaults or Events of Default
specified in Section 6.01 (6) or (7) are concerned, at any time in the
period ending on the 91st day after the date of such deposit;


 


(3)                                  Such Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a
default hereunder (other than a Default or Event of Default arising in
connection with the substantially contemporaneous borrowing of funds to fund
the deposit referenced in clause (1) above) or any other material agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound;


 


(4)                                  (i) In the event the Company elects paragraph
(b) above, the Company shall deliver to the Trustee an Opinion of
Counsel in the United States of America, to the effect that (A) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date, there has been a change in
the applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall state that, Holders shall not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance contemplated hereby and shall be subject to federal
income tax in the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred or
(ii) in the event the Company elects paragraph (c) above, the
Company shall deliver an Opinion of Counsel in the United States satisfactory
to the Trustee, to the effect that Holders shall not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance
contemplated hereby and shall be subject to federal income tax in the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred;


 


(5)                                  The Company shall have delivered to the
Trustee an Officers’ Certificate stating that the deposit under clause (1)
was not made by the Company with the intent of preferring the Holders over any
other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others;


 


(6)                                  the Company shall have delivered to the
Trustee an Opinion of Counsel (subject to customary qualifications and
exclusions) to the effect that the trust resulting from the deposit is not
required to register as an investment company under the Investment Company Act
of 1940; and


 


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(7)                                  The Company has delivered to the Trustee
an Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent specified herein relating to the defeasance contemplated
by this Section 8.01 have been complied with.


 


Notwithstanding the foregoing, the Opinion of Counsel
required by Section 8.01(d)(4)(i) above with respect to a Legal
Defeasance need not be delivered if all Notes not theretofore delivered to the
Trustee for cancellation (1) have become due and payable or (2) shall become
due and payable on the maturity date within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.


 


In the event all or any
portion of the Notes are to be redeemed through such irrevocable trust, the
Company must make arrangements reasonably satisfactory to the Trustee, at the
time of such deposit, for the giving of the notice of such redemption or
redemptions by the Trustee in the name and at the expense of the Company.


 


SECTION 8.02.  Satisfaction
and Discharge.


 


In addition to the Company’s
rights under Section 8.01, the Company may terminate all of its
obligations under this Indenture (subject to Section 8.03), and
this Indenture, the Notes, the Guarantees and the Collateral Agreements, and
all Liens created thereunder, shall be discharged and shall cease to be in
effect when:


 


(1)                                  either:


 


(a)                                  all the Notes
theretofore authenticated and delivered (except lost, stolen or destroyed Notes
which have been replaced or paid as provided in Section 2.07 and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust) have been delivered to the Trustee for
cancellation; or


 


(b)                                 all Notes not
theretofore delivered to the Trustee for cancellation (i) have become due and
payable, (ii) shall become due and payable at their stated maturity within one
year or (iii) are to be called for redemption within one year under
arrangements reasonably satisfactory to the Trustee, and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of, and
premium, if any, interest and Additional Interest, if any, on the Notes to the
date of deposit together with irrevocable instructions from the Company
directing the Trustee in writing to apply such funds to the payment thereof at
maturity or redemption, as the case may be;


 


(2)                                  all other sums payable under this
Indenture by the Company have been paid; and


 


(3)                                  the Company has delivered to the Trustee
an Officers’ Certificate and an Opinion of Counsel stating that all conditions
precedent under this Indenture relating to the satisfaction and discharge of
this Indenture have been complied with.


 


SECTION 8.03.  Survival of
Certain Obligations.


 


Notwithstanding the
satisfaction and discharge of this Indenture and of the Notes referred to in Section 8.01
or 8.02, the obligations of the Company under Sections 2.03, 2.04,
2.06, 2.07, Section 7.07


 


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and
Sections 8.05, 8.06 and 8.07 shall survive until the Notes
are no longer outstanding, and thereafter only the obligations of the Company
under Sections 7.07, 8.05, 8.06 and 8.07 shall
survive.


 


SECTION 8.04.  Acknowledgment of Discharge by
Trustee.


 


Subject to Section 8.07,
after (i) the conditions of Section 8.01 or 8.02 have
been satisfied, and (ii) the Company has paid or caused to be paid all
other sums payable hereunder by the Company, the Trustee upon written request
shall acknowledge in writing the discharge of the Company’s obligations under
this Indenture except for those surviving obligations specified in Section 8.03
and the Trustee shall execute and deliver to the Company any document
reasonably requested by the Company to effect or evidence any release and
discharge of Lien or Collateral Agreement contemplated by Section 12.06.


 


SECTION 8.05.  Application of Trust Moneys.


 


The Trustee shall hold any
U.S. Legal Tender or U.S. Government Obligations deposited with it in the
irrevocable trust established pursuant to Section 8.01.  The Trustee shall apply the deposited U.S.
Legal Tender or the U.S. Government Obligations, together with earnings
thereon, through the Paying Agent, in accordance with this Indenture, to the
payment of principal of, premium, if any, and interest on the Notes.  Anything in this Article Eight
to the contrary notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon the Company’s request any U.S. Legal Tender or
U.S. Government Obligations held by it as provided in Section 8.01(d)
which, in the opinion of a nationally-recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.


 


SECTION 8.06.  Repayment to the Company;
Unclaimed Money.


 


Subject to Sections 7.07,
8.01 and 8.02, the Trustee and the Paying Agent shall promptly
pay to the Company upon written request from the Company any excess U.S. Legal
Tender or U.S. Government Obligations held by them at any time.  The Trustee and the Paying Agent shall pay
to the Company, upon written request from the Company any money held by them
for the payment of principal, premium, if any, or interest that remains unclaimed
for two years after payment to the Holders is required; provided, however,
that the Trustee and the Paying Agent before being required to make any payment
may, but need not, at the expense of the Company cause to be published once in
a newspaper of general circulation in the City of New York or mail to each
Holder entitled to such money notice that such money remains unclaimed and that
after a date specified therein, which shall be at least thirty (30) days from
the date of such publication or mailing, any unclaimed balance of such money
then remaining shall be repaid to the Company. 
After payment to the Company, Holders entitled to money must look solely
to the Company for payment as general creditors unless an applicable abandoned
property law designated another Person, and all liability of the Trustee or
Paying Agent with respect to such money shall thereupon cease.


 


SECTION 8.07.  Reinstatement.


 


If the Trustee or Paying
Agent is unable to apply any U.S. Legal Tender or U.S. Government Obligations in
accordance with Section 8.01 or 8.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company’s obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01
or 8.02 until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S.


 


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Government
Obligations in accordance with Section 8.01 or 8.02; provided,
however, that if the Company has made any payment of premium, if any, or
interest on or principal of any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.


 


ARTICLE NINE


 


AMENDMENTS, SUPPLEMENTS AND WAIVERS


 


SECTION 9.01.  Without Consent of Holders.


 


From time to time, the
Company, the Guarantors, the Trustee and, if such amendment, modification,
waiver or supplement relates to any Collateral Agreement, the Collateral Agent,
without the consent of the Holders, may amend, modify, waive or supplement
provisions of this Indenture, the Notes, the Guarantees, the Registration
Rights Agreement and the Collateral Agreements:


 


(1)                                  to cure any ambiguity, defect or
inconsistency contained therein;


 


(2)                                  to provide for uncertificated Notes in addition
to or in place of certificated Notes;


 


(3)                                  to provide for the assumption of the
Company’s or a Guarantor’s obligations to Holders in the case of a merger or
consolidation involving the Company or such Guarantor or sale of all or
substantially all of the assets of the Company or such Guarantor or the release
of a Guarantor to the extent permitted under this Indenture;


 


(4)                                  to make any change that would provide any
additional rights or benefits to the Holders or that does not adversely affect
the legal rights of any such Holder under this Indenture, the Notes, the
Guarantees, the Registration Rights Agreement or the Collateral Agreements;


 


(5)                                  to comply with requirements of the
Commission in order to effect or maintain the qualification of this Indenture
under the TIA;


 


(6)                                  to allow any Subsidiary or any other
Person to guarantee the Notes;


 


(7)                                  to release a Guarantor as permitted by
the Indenture and the relevant Guarantee;


 


(8)                                  if necessary, in connection with any
addition or release of Collateral (including the release of any Collateral that
consists of Excluded Assets) permitted under the terms of this Indenture or the
Collateral Agreements; or


 


(9)                                  to make any amendment to the provisions
of this Indenture relating to the form, authentication, transfer and legending
of the Notes; provided, however, that (a) compliance with this Indenture as so
amended would not result in the Notes being transferred in violation of the
Securities Act or any other applicable securities law and (b) such amendment
does not materially affect the rights of Holders to transfer the Notes.


 


SECTION 9.02.  With Consent of Holders.


 


Subject to Section 6.07,
the Company and the Guarantors and the Trustee or the Collateral Agent, as
applicable, together, with the written consent of the Holder or Holders of at
least a


 


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majority
in aggregate principal amount of the outstanding Notes (subject to Section 2.09), may amend or supplement
this Indenture, the Notes, any Collateral Agreement or the Guarantees and any
other agreements and instruments entered into by any of them in connection
therewith without prior notice to any other Holders.  Subject to Section 6.07 and Section 2.09, the Holder or Holders of a
majority in aggregate principal amount of the outstanding Notes may waive
compliance by the Company with any provision of this Indenture, any Collateral
Agreement or the Notes and any other agreements and instruments entered into by
any of them in connection therewith without prior notice to any other
Holder.  However, any amendment to release all or
substantially all of the Collateral otherwise than in accordance with the terms
of the Indenture and the Collateral Agreements shall require the consent of
Holders of at least 66 2/3% of the principal amount of the then outstanding Notes and no  amendment, supplement or waiver, including
a waiver pursuant to Section 6.04, shall without the consent of
each Holder of each Note affected thereby:


 


(1)                                  reduce the principal amount of Notes
whose Holders must consent to an amendment, supplement or waiver of any
provision of this Indenture or the Notes (including any waiver of Defaults or
Events of Default);


 


(2)                                  reduce the rate of or change or have the
effect of changing the time for payment of interest, including defaulted
interest, or Additional Interest on any Notes;


 


(3)                                  reduce the principal of or change or have
the effect of changing the fixed maturity of any Notes, or change the date on
which any Notes may be subject to redemption or reduce the redemption price
therefor;


 


(4)                                  make any Notes payable in money other
than that stated in the Notes;


 


(5)                                  make any change in provisions of this
Indenture protecting the right of each Holder to receive payment of principal
of, premium, if any, interest and Additional Interest, if any, on such Note on
or after the due date thereof or to bring suit to enforce such payment;


 


(6)                                  amend, change or modify in any material
respect the obligation of the Company to make and consummate a Change of
Control Offer after the occurrence of a Change of Control or make and
consummate a Net Proceeds Offer with respect to any Asset Sale that has been
consummated or, modify any of the provisions or definitions with respect
thereto;


 


(7)                                  subordinate the Notes in right of payment
to any other Indebtedness of the Company or any Guarantor;


 


(8)                                  release any Guarantor from any of its
obligations under its Guarantee or this Indenture otherwise than in accordance
with the terms of this Indenture;


 


(9)                                  release all or substantially all of the
Collateral; or


 


(10)                            make any change to Section 9.01
or this Section 9.02.


 


It shall not be necessary
for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed amendment, supplement or waiver, but it
shall be sufficient if such consent approves the substance thereof.


 


After an amendment,
supplement or waiver under this Section 9.02 becomes effective, the
Company shall mail to the Holders affected thereby a notice briefly describing
the amendment,


 


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supplement
or waiver.  Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such amendment, supplement or waiver.


 


SECTION 9.03.  Compliance with TIA.


 


Every amendment, waiver or
supplement of this Indenture, the Notes, the Collateral Agreements or the
Guarantees shall comply with the TIA as then in effect.


 


SECTION 9.04.  Revocation and Effect of Consents.


 


Until an amendment, waiver
or supplement becomes effective, a consent to it by a Holder is a continuing
consent by the Holder and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder’s Note, even if
notation of the consent is not made on any Note.  Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder’s Note or portion of such Note
by written notice to the Trustee and the Company received before the date on
which the Trustee and if such amendment, waiver or supplement relates to any
Collateral Agreement, the Collateral Agent, receives an Officers’ Certificate
certifying that the Holders of the requisite principal amount of Notes have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.  An amendment,
waiver or supplement shall become effective upon receipt by the Trustee or the
Collateral Agent, as the case may be, of written consents from the Holders of
the requisite percentage in principal amount of the outstanding Notes or such
Officers’ Certificate, whichever first occurs, and the execution thereof by the
Trustee or the Collateral Agent, as the case may be.


 


The Company may, but shall
not be obligated to, fix a record date for the purpose of determining the
Holders entitled to consent to any amendment, supplement or waiver, which
record date shall be either (i) at least thirty (30) days prior to the
first solicitation of such consent or (ii) the date of the most recent list furnished
to the Trustee under Section 2.05. 
If a record date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. 
No such consent shall be valid or effective for more than ninety (90)
days after such record date.


 


After an amendment,
supplement or waiver becomes effective, it shall bind every Holder unless it
makes a change described in any of clauses (1) through (9) of Section 9.02,
in which case, the amendment, supplement or waiver shall bind only each Holder
of a Note who has consented to it and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder’s Note;
provided  that any such waiver shall not impair or affect the
right of any Holder to receive payment of principal of, premium, if any, and
interest on a Note, on or after the respective due dates expressed in such
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates without the consent of such Holder.


 


SECTION 9.05.  Notation on or Exchange of Notes.


 


If an amendment, supplement
or waiver changes the terms of a Note, the Trustee may require the Holder of
the Note to deliver the Note to the Trustee. 
The Trustee at the written direction of the Company may place an
appropriate notation on the Note about the changed terms and return it to the
Holder and the Trustee may place an appropriate notation on any Note thereafter
authenticated.  Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms.  Failure to make an


 


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appropriate
notation, or issue a new Note, shall not affect the validity and effect of such
amendment, supplement or waiver.  Any
such notation or exchange shall be made at the sole cost and expense of the
Company.


 


SECTION 9.06.  Trustee to Sign Amendments, Etc.


 


The Trustee or the
Collateral Agent, as applicable, shall execute any amendment, supplement or
waiver authorized pursuant to this Article Nine; provided  that
the Trustee or the Collateral Agent, as applicable, may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects
the rights, duties or immunities of the Trustee or the Collateral Agent, as
applicable, under this Indenture or any Collateral Agreement.  The Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel and an
Officers’ Certificate each stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture. 
Such Opinion of Counsel shall not be an expense of the Trustee and shall
be paid for by the Company.


 


SECTION 9.07.  Conformity with Trust Indenture Act.  Every supplemental indenture executed
pursuant to this Article Nine shall conform to the requirements of the TIA
as then in effect.


 


ARTICLE TEN


 


GUARANTEE


 


SECTION 10.01.  Guarantee.


 


Each Guarantor hereby fully,
irrevocably and unconditionally, jointly and severally, guarantees (such
guarantee to be referred to herein as the “Guarantee”), to each of the
Holders and to the Trustee and the Collateral Agent and their respective
successors and assigns that (i) the principal of, premium, if any and
interest on the Notes shall be promptly paid in full when due, subject to any
applicable grace period, whether upon redemption pursuant to the terms of the
Notes, by acceleration or otherwise, and interest on the overdue principal, if
any, and interest on any interest, if any, to the extent lawful, of the Notes
and all other obligations of the Company to the Holders, the Trustee and the
Collateral Agent hereunder, thereunder or under any Collateral Agreement, shall
be promptly paid in full or performed, all in accordance with the terms hereof
or thereof; and (ii) in case of any extension of time of payment or
renewal of any of the Notes or of any such other obligations, the same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether at stated
maturity, by acceleration or otherwise, subject, however, in the case of clauses
(i) and (ii) above, to the limitations set forth in Section 10.03.  The Guarantee of each Guarantor shall rank
senior in right of payment to all subordinated Indebtedness of such Guarantor
and equal in right of payment with all other senior Indebtedness of such
Guarantor, including borrowings or guarantees of borrowings under the Credit
Agreement.  Each Guarantor hereby agrees
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes, this Indenture or any
Collateral Agreement, the absence of any action to enforce the same, any waiver
or consent by any of the Holders with respect to any provisions hereof or
thereof, any release of any other Guarantor, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor.  Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that this Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes, this Indenture
and in this Guarantee.  If any Holder or
the Trustee is required by any court or otherwise to


 


72

















 


return
to the Company, any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or any Guarantor, any amount
paid by the Company or any Guarantor to the Trustee, the Collateral Agent or
such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. 
Each Guarantor further agrees that, as between each Guarantor, on the
one hand, and the Holders, the Collateral Agent and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of this
Guarantee notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and
(y) in the event of any acceleration of such obligations as provided in Article Six,
such obligations (whether or not due and payable) shall forthwith become due
and payable by each Guarantor for the purpose of this Guarantee.


 


SECTION 10.02.  Release
of a Guarantor.


 


A Guarantor will be automatically and unconditionally
released from its Guarantee (and may subsequently dissolve) without any action
required on the part of the Trustee or any Holder:


 


(1)                                  if
(a) all of the Capital Stock issued by such Guarantor or all or
substantially all of the assets of such Guarantor are sold or otherwise disposed
of (including by way of merger or consolidation) to a Person other than the
Company or any of its Domestic Restricted Subsidiaries or (b) such
Guarantor ceases to be a Restricted Subsidiary, and the Company otherwise
complies, to the extent applicable, with the covenant described below under Section 4.16,
or


 


(2)                                  if
the Company designates such Guarantor as an Unrestricted Subsidiary in
accordance with Section 4.10, or


 


(3)                                  if
the Company exercises its Legal Defeasance option or its Covenant Defeasance
option as described in Section 8.01, or


 


(4)                                  upon
satisfaction and discharge of this Indenture as described in Section 8.02
or payment in full of the principal of, premium, if any, accrued and unpaid
interest and Additional Interest, if any, on the Notes and all other
Obligations that are then due and payable.


 


The Trustee shall promptly
deliver an appropriate instrument evidencing such release upon receipt of a
written request by the Company accompanied by an Officers’ Certificate
certifying as to the compliance with this Section 10.02.  Any Guarantor not so released remains liable
for the full amount of its Guarantee as provided in this Article Ten.


 


SECTION 10.03.  Limitation of Guarantor’s Liability.


 


Each Guarantor and, by its
acceptance hereof, each of the Holders hereby confirms that it is the intention
of all such parties that the guarantee by such Guarantor pursuant to its
Guarantee not constitute a fraudulent transfer or conveyance for purposes of
any Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar Federal or state law.  To effectuate the foregoing intention, the
Holders and such Guarantor hereby irrevocably agree that the obligations of
such Guarantor under the Guarantee shall be limited to the maximum amount as
shall, after giving effect to all other contingent and fixed liabilities of
such Guarantor and after giving effect to any collections from or payments made
by or on behalf of any other Guarantor in respect of the obligations of such
other Guarantor under its Guarantee or pursuant to Section 10.05,
result in the obligations of such Guarantor under the Guarantee not
constituting such a fraudulent transfer or conveyance.


 


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SECTION 10.04.  [Reserved].


 


SECTION 10.05.  Contribution.


 


In order to provide for just
and equitable contribution among the Guarantors, the Guarantors agree, inter
se, that each Guarantor that makes a payment or distribution under a Guarantee
shall be entitled to a pro  rata contribution from each other Guarantor
hereunder based on the net assets of each other Guarantor.  The preceding sentence shall in no way
affect the rights of the Holders of Notes to the benefits of this Indenture,
the Notes or the Guarantees.


 


SECTION 10.06.  Waiver of Subrogation.


 


Each Guarantor agrees that
it shall not be entitled to any right of subrogation in relation to the Holders
in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby.


 


SECTION 10.07.  Evidence of Guarantee.


 


To evidence their guarantees
to the Holders set forth in this Article Ten, each of the
Guarantors hereby agrees to execute the notation of Guarantee in substantially
the form included in the Notes attached as Exhibits A and B.  Each such notation of Guarantee shall be
signed on behalf of each Guarantor by an Officer or an assistant
Secretary.  An Officer (who shall, in
each case, have been duly authorized by all requisite corporate actions) of the
Guarantors shall execute the Guarantees by manual or facsimile signature.


 


If an Officer whose
signature is on a Note was an Officer at the time of such execution but no
longer holds that office or position at the time the Trustee authenticates such
Note, such Note shall nevertheless be valid.


 


Each Guarantor hereby agrees
that its Guarantee set forth in Section 10.01 shall remain in full
force and effect notwithstanding any failure to endorse on each Note a notation
of such Guarantee.


 


If an Officer or assistant
Secretary whose signature is on this Indenture or on the Guarantee no longer
holds that office at the time the Trustee authenticates the Note on which a
Guarantee is endorsed, the Guarantee shall be valid nevertheless.


 


The delivery of any Note by
the Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Guarantee set forth in this Indenture on behalf of the
Guarantors.


 


SECTION 10.08.  Waiver of
Stay, Extension or Usury Laws.


 


Each Guarantor covenants to
the extent permitted by law that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law or any usury law or other law that would prohibit or forgive
such Guarantor from performing its Guarantee as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Guarantee; and each Guarantor hereby
expressly waives to the extent permitted by law all benefit or advantage of any
such law, and covenants that it shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.


 


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ARTICLE ELEVEN


 


MISCELLANEOUS


 


SECTION 11.01.  Trust Indenture Act Controls.


 


If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.  Any provision of the TIA
which is required to be included in a qualified Indenture, but not expressly
included herein, shall be deemed to be included by this reference.


 


SECTION 11.02.  Notices.


 


Any notices or other communications
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:


 


if to the Company:


 


Blue Ridge Paper Products Inc.


41 Main Street


P.O. Box 1429


Canton, North Carolina 28716


Attention: John Wadsworth


Facsimile Number:  (828) 646-6101


 


if to the Trustee:


 


U.S. Bank National Association


60 Livingston Avenue


St. Paul, MN 55107-2292


Attn: Corporate Trust
Administration


Facsimile Number: (651)
495-8097


 


if to the Collateral Agent:


 


U.S. Bank National Association


60 Livingston Avenue


St. Paul, MN 55107-2292


Attn: Corporate Trust
Administration


Facsimile Number: (651)
495-8097


 


Each of the Company and the
Trustee by written notice to each other may designate additional or different
addresses for notices to such Person. 
Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
faxed; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address or a
notice sent by mail to the Trustee shall not be deemed to have been given until
actually received by the addressee).


 


75

















 


Any notice or communication
mailed to a Holder shall be mailed to such Holder by first class mail or other
equivalent means at such Holder’s address as it appears on the registration
books of the Registrar and shall be sufficiently given to such Holder if so
mailed within the time prescribed.


 


Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.  If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.


 


SECTION 11.03.  Communications by Holders with
Other Holders.


 


Holders may communicate
pursuant to TIA Section 312(b) with other Holders with respect to their
rights under this Indenture, any Collateral Agreement, any Guarantee or the
Notes.  The Company, the Trustee, the Collateral
Agent, the Registrar and any other Person shall have the protection of TIA
Section 312(c).


 


SECTION 11.04.  Certificate and Opinion as to
Conditions Precedent.


 


Upon any request or
application by the Company or any Guarantor to the Trustee to take any action
under this Indenture or any Collateral Agreement, the Company shall furnish to
the Trustee upon request:


 


(1)                                  an Officers’ Certificate, in form and
substance reasonably satisfactory to the Trustee, stating that, in the opinion
of the signers, all conditions precedent to be performed by the Company or the
applicable Guarantor (as the case may be), if any, provided for in this
Indenture or any Collateral Agreement relating to the proposed action have been
complied with; and


 


(2)                                  an Opinion of Counsel stating that, in
the opinion of such counsel, all such conditions precedent to be performed by
the Company or the applicable Guarantor (as the case may be), if any, provided
for in this Indenture or any Collateral Agreement relating to the proposed
action have been complied with.


 


SECTION 11.05.  Statements Required in
Certificate or Opinion.


 


Each certificate or opinion
with respect to compliance with a condition or covenant provided for in this
Indenture or any Collateral Agreement, other than the Officers’ Certificate
required by Section 4.06, shall include:


 


(1)                                  a statement that the Person making such
certificate or opinion has read such covenant or condition;


 


(2)                                  a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;


 


(3)                                  a statement that, in the opinion of such
Person, he has made such examination or investigation as is reasonably
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and


 


(4)                                  a statement as to whether or not, in the
opinion of each such Person, such condition or covenant has been complied with.


 


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SECTION 11.06.  Rules by Trustee, Paying Agent,
Registrar.


 


The Trustee may make
reasonable rules in accordance with the Trustee’s customary practices for
action by or at a meeting of Holders. 
The Paying Agent or Registrar may make reasonable rules for its
functions.


 


SECTION 11.07.  Legal Holidays.


 


A “Legal Holiday”
used with respect to a particular place of payment is a Saturday, a Sunday or a
day on which banking institutions in New York, New York or at such place of
payment are not required to be open.  If
a payment date is a Legal Holiday at such place, payment may be made at such
place on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period.


 


SECTION 11.08.  Governing Law.


 


THIS INDENTURE, THE NOTES
AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS INDENTURE.


 


SECTION 11.09.  No Adverse Interpretation of Other Agreements.


 


This Indenture may not be
used to interpret another indenture, loan or debt agreement of the Company or
any of its Subsidiaries.  Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.


 


SECTION 11.10.  No Recourse
Against Others.


 


A  past, present or future director, officer, employee,
stockholder or incorporator, as such, of the Company or any Guarantor shall not
have any liability for any obligations of the Company or the Guarantors under
the Notes, the Guarantees, the Collateral Agreements or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation.  Each Holder, by accepting a
Note, waives and releases all such liability. 
Such waiver and release are part of the consideration for the issuance
of the Notes.


 


SECTION 11.11.  Successors.


 


All  agreements of the Company and the
Guarantors in this Indenture, the Notes, and the Guarantees shall bind their
successors.  All  agreements of the Trustee and the
Collateral Agent in this Indenture shall bind their successors.


 


SECTION 11.12.  Duplicate Originals.


 


All  parties may sign any number of copies of
this Indenture.  Each signed copy shall
be an original, but all of them together shall represent the same agreement.


 


77

















 


SECTION 11.13.  Severability.


 


In case any one or more of
the provisions in this Indenture, the Notes or in the Guarantees shall be held
invalid, illegal or unenforceable, in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions shall not in any way be affected or impaired thereby,
it being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.


 


SECTION 11.14.  Waiver of Jury Trial.


 


EACH OF THE PARTIES HERETO
AND THE HOLDERS (BY THEIR ACCEPTANCE OF A NOTE) HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS INDENTURE, THE NOTES,
THE GUARANTEES, THE COLLATERAL AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED BY
THIS INDENTURE.


 


ARTICLE TWELVE


 


SECURITY


 


SECTION 12.01.  Grant of Security Interest.


 


(a)                                  To secure the due and punctual payment of
the principal of, premium, if any, and interest on the Notes and amounts due
hereunder and under the Guarantees when and as the same shall be due and
payable, whether on an Interest Payment Date, by acceleration, purchase,
repurchase, redemption or otherwise, and interest on the overdue principal of,
premium, if any, and interest (to the extent permitted by law), if any, on the
Notes and the performance of all other Obligations of the Company and the
Guarantors to the Holders, the Collateral Agent or the Trustee under this
Indenture, the Collateral Agreements, the Guarantees and the Notes, the Company
and the Guarantors hereby covenant to cause the Collateral Agreements to be
executed and delivered concurrently with this Indenture.  Subject to the Intercreditor Agreement, the
Collateral Agreements shall provide for the grant by the Company and Guarantors
party thereto to the Collateral Agent of security interests in the Collateral.


 


(b)                                 The Trustee and each Holder, by its
acceptance of a Note, consents and agrees to the terms of each Collateral Agreement,
as the same may be in effect or may be amended from time to time in accordance
with their respective terms, and authorizes and directs the Collateral Agent to
enter into the Collateral Agreements and to perform its obligations and
exercise its rights thereunder in accordance therewith.  The Company shall, and shall cause each
Guarantor to, do or cause to be done, at its sole cost and expense, all such
actions and things as may be necessary or as may be required by the provisions
of the Collateral Agreements to (i) create Liens pursuant to one or more
Collateral Agreements on their respective properties in favor of the Collateral
Agent for the benefit of itself, the Trustee and the Holders or (ii) more fully
or accurately describe the property intended to be Collateral or the
obligations intended to be secured by the Collateral Agreements.


 


SECTION 12.02.  Intercreditor Agreement.


 


This Article 12 of this Indenture is
subject to the terms, limitations and conditions set forth in the Intercreditor
Agreement.  The Trustee and each Holder
of a Note, by its acceptance thereof, is deemed to have authorized and
instructed the Collateral Agent to enter into the Intercreditor Agreement on
its behalf.


 


78

















 


SECTION 12.03.  Recording and Opinions.


 


(a)                                  The Company shall, and shall cause each
Guarantor to, at its sole cost and expense, take all such actions as may be
required under applicable law to perfect the Liens created by the Collateral
Agreements, including (i) the filing of financing statements and continuation
statements relating to the Company or any Domestic Restricted Subsidiary, (ii)
the recordation and filing of Mortgages and fixture filings related thereto and
(iii) the delivery of the certificates evidencing Collateral pledged under any
Collateral Agreement.


 


(b)                                 The Company shall furnish to the Trustee
and the Collateral Agent (if other than the Trustee), on or within one month of
May 15 of each year, commencing May 15, 2004, an Opinion of Counsel either (i)
stating that, in the opinion of such counsel, all action necessary to perfect
the security interests created by the Collateral Agreements and reciting the
details of such action or referring to prior Opinions of Counsel in which such
details are given have been taken or (ii) stating that, in the Opinion of such
Counsel, no such action is necessary to perfect any security interest created
under any of the Collateral Agreements.


 


SECTION 12.04.  Release of Collateral.


 


(a)                                  The Collateral Agent shall not at any
time release Collateral from the security interests created by the Collateral
Agreements unless such release is in accordance with the provisions of this
Indenture and the applicable Collateral Agreements or the Intercreditor
Agreement.


 


(b)                                 At any time when a Default or Event of
Default has occurred and is continuing and the maturity of the Notes has been
accelerated (whether by declaration or otherwise) and the Trustee has delivered
a notice of acceleration to the Collateral Agent, no release of Collateral
pursuant to the provisions of the Collateral Agreements will be effective as
against the Holders, except as provided in the Intercreditor Agreement.


 


(c)                                  The release of any Collateral from the
terms of the Collateral Agreements shall not be deemed to impair the security
under this Indenture in contravention of the provisions hereof if and to the
extent the Collateral is released pursuant to this Indenture and the Collateral
Agreements or pursuant to the Intercreditor Agreement.  To the extent applicable, the Company shall
cause TIA Section 314(d) relating to the release of property from the
security interests created by this Indenture and the Collateral Agreements to
be complied with.  Any certificate or
opinion required by TIA Section 314(d) may be made by an Officer of the
Company, except in cases where TIA Section 314(d) requires that such
certificate or opinion be made by an independent Person, which Person shall be
an independent engineer, appraiser or other expert selected by the Company and approved
by the Trustee in the exercise of reasonable care.  A Person is “independent” if such Person (a) is in fact
independent, (b) does not have any direct financial interest or any material
indirect financial interest in the Company or in any Affiliate of the Company
and (c) is not an officer, employee, promoter, underwriter, trustee, partner or
director or person performing similar functions to any of the foregoing for the
Company.  The Trustee and the Collateral
Agent shall be entitled to receive and rely conclusively upon a certificate
provided by any such Person confirming that such Person is independent within
the foregoing definition.


 


(d)                                 Notwithstanding any provision to the
contrary herein, Collateral comprised of accounts receivable, inventory or
(prior to the occurrence and during the continuance of an Event of Default) the
proceeds of the foregoing shall be subject to release upon sales of such
inventory and collection of the proceeds of such accounts receivable in the
ordinary course of business.  If
requested in writing by the Company, the Trustee shall instruct the Collateral
Agent to execute and deliver such documents, instruments or statements and to
take such other action as the Company may request to


 


79

















 


evidence or confirm that the Collateral falling under
this Section 12.04(d) has been released from the Liens of each of
the Collateral Agreements.  The
Collateral Agent shall execute and deliver such documents, instruments and
statements and shall take all such actions promptly upon receipt of such
instructions from the Trustee.


 


SECTION 12.05.  Specified Releases of Collateral.


 


Subject to Section 12.04,
Collateral may be released from the Lien and security interest created by the
Security Documents at any time or from time to time in accordance with the
provisions of the Collateral Agreements, including the Intercreditor Agreement,
or as provided hereby.  Upon the request
of the Company pursuant to an Officers’ Certificate certifying that all
conditions precedent hereunder have been met and without the consent of any
Holder, the Company and the Guarantors will be entitled to releases of assets
included in the Collateral from the Liens securing the obligations under the
Notes and the Guarantees under any one or more of the following circumstances:


 


(1)                                  to
enable the Company (or a Guarantor) to consummate asset dispositions permitted
or not prohibited under Section 4.16;


 


(2)                                  if any Subsidiary
that is a Guarantor is released from its Guarantee; or


 


(3)                                  as required pursuant to the terms of the
Intercreditor Agreement.


 


Upon receipt of such
Officers’ Certificate and any necessary or proper instruments of termination,
satisfaction or release prepared by the Company, the Collateral Agent shall
execute, deliver or acknowledge such instruments or releases to evidence the
release of any Collateral permitted to be released pursuant to this Indenture
or the Collateral Agreements, including the Intercreditor Agreement.


 


SECTION 12.06.  Release upon Satisfaction or
Defeasance of all Outstanding Obligations.


 


The Liens on, and pledges
of, all Collateral will also be terminated and released upon (i) payment
in full of the principal of, premium, if any, on, accrued and unpaid interest
and Additional Interest, if any, on the Notes and all other Obligations
hereunder, the Guarantees and the Collateral Agreements that are due and
payable at or prior to the time such principal, premium, if any, accrued and
unpaid interest and Additional Interest, if any, are paid, (ii) a
satisfaction and discharge of this Indenture as described below under Section 8.02
and (iii) the occurrence of a Legal Defeasance or Covenant Defeasance as
described below under Section 8.01.


 


SECTION 12.07.  Form and Sufficiency of Release.


 


In the event that the
Company or any Guarantor has sold, exchanged, or otherwise disposed of or
proposes to sell, exchange or otherwise dispose of any portion of the
Collateral that may be sold, exchanged or otherwise disposed of by the Company
or such Guarantor, and the Company or such Guarantor requests in writing the
Trustee or the Collateral Agent to furnish a written disclaimer, release or
quit-claim of any interest in such property under this Indenture and the
Collateral Agreements, the Collateral Agent and the Trustee, as applicable,
shall execute, acknowledge and deliver to the Company or such Guarantor (in
proper form) such an instrument promptly after satisfaction of the conditions
set forth herein for delivery of any such release.  Notwithstanding the preceding sentence, all purchasers and
grantees of any property or rights purporting to be released herefrom shall be
entitled to rely upon any


 


80

















 


release
executed by the Collateral Agent hereunder as sufficient for the purpose of
this Indenture and as constituting a good and valid release of the property
therein described from the Lien of this Indenture or of the Collateral
Agreements.


 


SECTION 12.08.  Purchaser Protected.


 


No purchaser or grantee of any property or rights purporting to be
released herefrom shall be bound to ascertain the authority of the Trustee or
the Collateral Agent to execute the release or to inquire as to the existence
of any conditions herein prescribed for the exercise of such authority; nor
shall any purchaser or grantee of any property or rights permitted by this
Indenture to be sold or otherwise disposed of by the Company be under any
obligation to ascertain or inquire into the authority of the Company to make
such sale or other disposition.


 


SECTION 12.09.  Authorization of Actions to Be
Taken by the Collateral Agent Under the Collateral Agreements.


 


Subject to the provisions of
the applicable Collateral Agreements, including the Intercreditor Agreement,
the Trustee and each Holder, by acceptance of its Note(s), agrees that (a) the
Collateral Agent shall execute and deliver the Collateral Agreements, including
the Intercreditor Agreement, and act in accordance with the terms thereof, (b)
the Collateral Agent may, in its sole discretion and without the consent of the
Trustee or the Holders, take all actions it deems necessary or appropriate in
order to (i) enforce any of the terms of the Collateral Agreements, including
the Intercreditor Agreement, and (ii) collect and receive any and all amounts
payable in respect of the Obligations of the Company and the Guarantors
hereunder and under the Notes, the Guarantees, the Collateral Agreements,
including the Intercreditor Agreement, and (c) the Collateral Agent shall have
power to institute and to maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any act that may be
unlawful or in violation of the Collateral Agreements or this Indenture, and
suits and proceedings as the Collateral Agent may deem expedient to preserve or
protect its interests and the interests of the Trustee and the Holders in the
Collateral (including the power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or
order would impair the security interest thereunder or be prejudicial to the
interests of the Holders, the Trustee or the Collateral Agent).  Notwithstanding the foregoing, the
Collateral Agent may request the direction of the Holders with respect to any
such actions and upon receipt of the written consent of the Holders of at least
a majority in aggregate principal amount of the outstanding Notes, shall take
such actions; provided  that all actions so taken shall, at all
times, be in conformity with the requirements of the Intercreditor Agreement.


 


SECTION 12.10.  Authorization of Receipt of Funds
by the Collateral Agent Under the Collateral Agreements.


 


The Collateral Agent is
authorized to receive any funds for the benefit of itself, the Trustee and the
Holders distributed under the Collateral Agreements, including the
Intercreditor Agreement, to the extent permitted under the Intercreditor
Agreement, for turnover to the Trustee to make further distributions of such
funds to itself, the Collateral Agent and the Holders in accordance with the
provisions of Section 6.10 and the other provisions of this
Indenture.


 


81

















 


SIGNATURES


 


IN WITNESS
WHEREOF, the parties hereto have caused this Indenture to be duly executed, all
as of the date first written above.


 


	
   

  	
  BLUE RIDGE
  PAPER PRODUCTS INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard
  Lozyniak

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION, as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank
  Leslie

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Frank Leslie

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION, as Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank
  Leslie

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Frank Leslie

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BRPP, LLC

  	
   

  
	
   

  	
  By: Blue
  Ridge Paper Products Inc, as sole member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Wadsworth

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John
  Wadsworth

  
	
   

  	
   

  	
  Title:

  	
   

  
					



 


1

















 


EXHIBIT
A


 


[FORM OF INITIAL NOTE AND ADDITIONAL NOTE]


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS.  NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.


 


THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS A NON-U.S.
PURCHASER AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN
INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION
DATE”) WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH BLUE RIDGE PAPER PRODUCTS INC.(THE “COMPANY”) OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY), ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR
SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (E) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C), (D) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM.  IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY SHALL BE COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. 
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.


 


2

















 


BLUE RIDGE PAPER PRODUCTS INC.


 


91⁄2% SENIOR SECURED NOTE DUE 2008


 


	
  CUSIP No.

  	
   

  	
   

  
	
  No.

  	
   

  	
  $

  



 


Blue
Ridge Paper Products Inc., a Delaware corporation (the “Company,” which
term includes any successor entity), for value received promises to pay to
                                     
or registered assigns the principal sum of
                             
Dollars (or such principal amount as may be set forth in the records of the
Trustee hereinafter referred to in accordance with the Indenture) on
December 15, 2008, and to pay interest thereon as hereinafter set forth.


 


Interest Rate:  9.5%


 


Interest Payment Dates:  Interest will be payable semi-annually in
cash in arrears on June 15 and December 15 of each year, beginning on
June 15, 2004.


 


Record Dates:  June 1 and December 1.


 


Reference is made to the
further provisions of this Note contained on the reverse side of this Note,
which will for all purposes have the same effect as if set forth at this place.


 


IN WITNESS WHEREOF, the
Company has caused this Note to be signed manually or by facsimile by its duly
authorized officer.


 


	
   

  	
  BLUE RIDGE PAPER
  PRODUCTS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  



 


3

















 


TRUSTEE CERTIFICATE OF AUTHENTICATION


 


This is one of the 91⁄2%
Senior Secured Notes due 2008 referred to in the within-mentioned Indenture.


 


 


	
   

  	
  U.S. Bank National
  Association, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  



 


4

















 


(REVERSE OF SECURITY)


 


91⁄2% Senior Secured Note due 2008


 


1.                                       Interest.  Blue Ridge
Paper Products Inc., a Delaware corporation (the “Company”), promises to
pay interest on the principal amount of this Note at the rate per annum shown
above.  Interest on the Note will accrue
from the most recent date on which interest has been paid or, if no interest
has been paid, from and including the date of issuance.  The Company will pay interest semi-annually
in arrears on each Interest Payment Date, commencing June 15, 2004.  Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.


 


[FOR REGULATION S TEMPORARY GLOBAL NOTES INSERT: Until this Regulation
S Temporary Global Note is exchanged for one or more Regulation S Permanent
Global Notes, the Holder hereof shall not be entitled to receive payments of
interest hereon; until so exchanged in full, this Regulation S Temporary Global
Note shall in all other respects be entitled to the same benefits as other
Notes under the Indenture.]


 


2.                                       Method of Payment. 
The Company shall pay interest on the Notes (except defaulted interest)
to the Persons who are the registered Holders at the close of business on the
Record Date immediately preceding the Interest Payment Date even if the Notes
are cancelled on registration of transfer or registration of exchange after
such Record Date, and on or before such Interest Payment Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments. 
The Company shall pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts (“U.S. Legal Tender”). 
However, the Company may pay principal and interest by check payable in
such U.S. Legal Tender.  The Company may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder’s registered address.


 


3.                                       Paying Agent and Registrar. 
Initially, U.S. Bank National Association (the “Trustee”) will
act as Paying Agent and Registrar.  The
Company may change any Paying Agent, Registrar or co-Registrar without notice
to the Holders.  The Company may act as
Paying Agent or Registrar.


 


4.                                       Indenture.  The Notes
were issued under an Indenture, dated as of December 17, 2003 (the “Indenture”),
among the Company, the Subsidiary Guarantors named therein and the
Trustee.  Capitalized terms herein are
used as defined in the Indenture unless otherwise defined herein.  The  terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
§§ 77aaa-77bbbb) (the “TIA”), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA.  Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of such
terms.  The Notes are senior secured
obligations of the Company and are subject to the provisions of the
Intercreditor Agreement.  Each Holder,
by accepting a Note, agrees to be bound by all of the terms and provisions of
the Indenture, as the same may be amended from time to time.


 


5.                                       Redemption.


 


(a)                                  Optional Redemption on or After
December 15, 2006.  The Notes will be redeemable
at the option of the Company, in whole or in part at any time or from time to
time, on and after December 15, 2006, at the following Redemption Prices
(expressed as percentages of the principal


 


5

















 


amount thereof) if redeemed during the twelve-month
period commencing on December 15 of the year set forth below, plus, in
each case, accrued and unpaid interest and Additional Interest, if any, thereon
to the Redemption Date:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2006

  	
   

  	
  104.750

  	
  %

  
	
  2007 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


(b)                                 Optional Redemption upon Equity Offerings. 
At any time, or from time to time, prior to December 15, 2005, the
Company may, at its option, use an amount equal to the net cash proceeds of one
or more Equity Offerings to redeem up to 35% of the aggregate principal amount
of the Notes originally issued under the Indenture at a Redemption Price equal
to 109.500% of the principal amount thereof, plus accrued and unpaid interest
and Additional Interest thereon, if any, to the Redemption Date.  In order to effect the foregoing redemption
with the proceeds of any Equity Offering, at least 65% of the aggregate
principal amount of the Notes originally issued under the Indenture shall
remain outstanding immediately after such Redemption Date.


 


6.                                       Notice of Redemption. 
Notice of redemption will be mailed by first-class mail at least 30 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder’s registered address.  If fewer
than all of the Notes are to be redeemed, at any time, selection of Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee deems to be fair and appropriate; provided that no partial redemption will
reduce the principal amount of a Note not redeemed to a denomination of less
than $1,000; and provided, further, that any such partial redemption
made with the proceeds of an Equity Offering will be made only on a pro rata
basis or on as nearly a pro rata basis as practicable (subject to the
procedures of the DTC or any other depository) unless such method is otherwise
prohibited.  Notes in denominations of
$1,000 or more may be redeemed in part.


 


Except as set forth in the
Indenture, if monies for the redemption of the Notes called for redemption
shall have been deposited with the Paying Agent for redemption on such
redemption date sufficient to pay such redemption price plus accrued and unpaid
interest and Additional Interest, if any, the Notes called for redemption will
cease to bear interest from and after such redemption date, and the only
remaining right of the Holders of such Notes will be to receive payment of the
redemption price plus accrued and unpaid interest and Additional Interest, if
any, as of the redemption date upon surrender to the Paying Agent of the Notes
redeemed.


 


7.                                       Offers to Purchase. 
Sections 4.15 and 4.16 of the Indenture provide that upon the occurrence
of a Change of Control and after certain Asset Sales and subject to further
limitations contained therein, the Company will make an offer to purchase
certain amounts of the Notes in accordance with the procedures set forth in the
Indenture.


 


8.                                       Registration Rights. 
Pursuant to the Registration Rights Agreement among the Company, the
Subsidiary Guarantor[s] and the Initial Purchaser[s], the Company will be
obligated to consummate an exchange offer. 
Upon such exchange offering, the Holders of Notes shall have the right,
subject to compliance with securities laws, to exchange such Notes for 91⁄2%
Senior Secured Notes due 2008, which have been registered under the Securities
Act (the “Exchange Notes”), in like principal amount and having terms
identical in all material respects to the Initial Notes.  The Holders of the Notes shall be entitled
to receive certain additional interest payments in the event such exchange
offer is not consummated and upon certain other conditions, all pursuant to and
in accordance with the terms of the Registration Rights Agreement.


 


6

















 


9.                                       Denominations; Transfer; Exchange. 
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples thereof. 
A Holder shall register the transfer of or exchange of Notes in accordance
with the Indenture.  The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes, fees or similar governmental charges
payable in connection therewith as permitted by the Indenture.  The Registrar need not register the transfer
of or exchange of any Notes or portions thereof selected for redemption.


 


10.                                 Persons Deemed Owners. 
The registered Holder of a Note shall be treated as the owner of it and
the Notes of which it is composed for all purposes.


 


11.                                 Unclaimed Money. 
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee and the Paying Agent may pay the money without interest
thereon back to the Company.  After
that, all liability of the Trustee and such Paying Agent with respect to such
money shall cease.


 


12.                                 Discharge Prior to Redemption or Maturity. If the Company at any time deposits
with the Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to
pay the principal of and interest on the Notes to redemption or Maturity and
complies with the other provisions of the Indenture relating thereto, the
Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, except for the rights of Holders to
receive payments in respect of the principal of, and premium, if any, interest
and Additional Interest, if any, on the Notes when such payments are due from
the deposits referred to above.


 


13.                                 Amendment; Supplement; Waiver. 
Subject to certain exceptions, the Indenture, the Notes and the
Guarantee[s] may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing Default or Event of Default or noncompliance with
any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding.  Without consent of any Holder, the parties
thereto may amend or supplement the Indenture, the Notes and the Guarantee[s]
to, among other things, cure any ambiguity, defect or inconsistency, provide
for uncertificated Notes in addition to or in place of certificated Notes,
comply with the TIA, or comply with Article Five of the Indenture or make
any other change that does not adversely affect in any material respect the
rights of any Holder of a Note.


 


14.                                 Restrictive Covenants. 
The Indenture imposes certain limitations on the ability of the Company
and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of their Capital Stock or
certain Indebtedness, enter into transactions with Affiliates, create dividend
or other payment restrictions affecting Subsidiaries, merge or consolidate with
any other Person, sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its assets or adopt a plan of liquidation.  Such limitations are subject to a number of
important qualifications and exceptions. 
The Company must annually report to the Trustee on compliance with such
limitations.


 


15.                                 Successors.  When a
successor assumes, in accordance with the Indenture, all the obligations of its
predecessor under the Notes, the Guarantee[s] and the Indenture, the
predecessor will be released from those obligations.


 


16.                                 Defaults and Remedies. 
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Notes then outstanding
may declare all the Notes to be due and payable in the manner, at the time and
with the effect provided in the


 


7

















 


Indenture. 
Holders of Notes may not enforce the Indenture except as provided in the
Indenture.  The Trustee is not obligated
to enforce the Indenture or the Notes unless it has received indemnity
satisfactory to it.  The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Notes then outstanding to direct the
Trustee in its exercise of any trust or power. 
The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or interest)
if it determines that withholding notice is in their interest.


 


17.                                 Trustee Dealings with Company. 
Subject to the terms of the TIA and the Indenture, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Subsidiaries or
their respective Affiliates as if it were not the Trustee.


 


18.                                 No Recourse Against Others. 
No past, present or future stockholder, director, officer, employee or
incorporator, as such, of the Company or the Subsidiary Guarantors shall have
any liability for any obligation of the Company under the Notes, the
Guarantees, the Collateral Agreements or the Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation.  Each Holder of a Note by accepting a Note
waives and releases all such liability. 
The waiver and release are part of the consideration for the issuance of
the Notes.


 


19.                                 Guarantees.                                 Payment of principal and interest and
Additional Interest, if any (including interest on overdue principal and
overdue interest, if lawful), is unconditionally guaranteed, jointly and
severally, by each of the Subsidiary Guarantors.


 


20.                                 Intercreditor Agreement. 
Each Holder, by its acceptance of its Note, agrees to be bound by the
terms of the Intercreditor Agreement and any replacement Intercreditor
Agreement and each of the Subsidiary Guarantors and the Holders hereby
authorize the Trustee and the Collateral Agent to bind the Holders to the
extent provided in the Intercreditor Agreement.


 


21.                                 Authentication. 
This Note shall not be valid until the Trustee or Authenticating Agent
manually signs the certificate of authentication on this Note.


 


22.                                 Governing Law. 
The laws of the State of New York shall govern this Note, the
Guarantees, the Collateral Agreements and the Indenture, without regard to
principles of conflict of laws.


 


23.                                 Abbreviations and Defined Terms. 
Customary abbreviations may be used in the name of a Holder of a Note or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).


 


The Company will furnish to
any Holder of a Note upon written request and without charge a copy of the
Indenture.  Requests may be made
to:  Blue Ridge Paper Products Inc., 41
Main Street, Canton, North Carolina 28716, Attn:  Chief Financial Officer.


 


8

















 


FORM OF GUARANTEE


 


The undersigned and its
successors under the Indenture has irrevocably and unconditionally guaranteed,
on a senior secured basis to the extent set forth in the Indenture, dated as of
December 17, 2003, by and among Blue Ridge Paper Products Inc. (the “Company”),
the Subsidiary Guarantors and U.S. Bank National Association as Trustee and
Collateral Agent (the “Indenture”), (i) the due and punctual payment of
the principal of, premium, if any, and interest and Additional Interest, if
any, on the Notes, whether at maturity, by acceleration or otherwise, the due
and punctual payment of interest on the overdue principal of and interest and
Additional Interest, if any, on the Notes, to the extent lawful, and the due
and punctual performance of all other obligations of the Company to the Holders
or the Trustee all in accordance with the terms set forth in Article Ten
of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.


 


THE OBLIGATIONS OF THE
UNDERSIGNED TO HOLDERS OF THE NOTES AND TO THE TRUSTEE PURSUANT TO THIS
NOTATION OF GUARANTEE (THE “GUARANTEE”) AND THE INDENTURE ARE EXPRESSLY SET
FORTH IN ARTICLE TEN OF THE INDENTURE AND REFERENCE IS HEREBY MADE TO THE
INDENTURE FOR THE PRECISE TERMS OF THE GUARANTEE AND ALL OTHER PROVISIONS OF
THE INDENTURE TO WHICH THE GUARANTEE RELATES. 
EACH HOLDER OF A NOTE, BY ACCEPTING THE SAME, (A) AGREES TO AND SHALL BE
BOUND BY SUCH PROVISIONS AND (B) APPOINTS THE TRUSTEE ATTORNEY-IN-FACT FOR SUCH
HOLDER FOR SUCH PURPOSES.


 


This Guarantee shall be
governed by and construed in accordance with the laws of the State of New York.


 


	
   

  	
  [NAME OF SUBSIDIARY
  GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


9

















 


ASSIGNMENT FORM


 


If you the Holder want to
assign this Note, fill in the form below and have your signature guaranteed:


 


I or we assign and transfer this Note to:


 


 


(Print or type name, address and zip code and

social security or tax ID number of assignee)


 


and irrevocably
appoint                                                                                                                                   
agent to transfer this Note on the books of the Company.  The agent may substitute another to act for
him.


 


	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your
  name appears on the

  other side of this Note)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
								



 


In connection with any
transfer of this Note occurring prior to the date which is the earlier of
(i) the date of the declaration by the SEC of the effectiveness of a
registration statement under the Securities Act of 1933, as amended (the “Securities
Act”), covering resales of this Note (which effectiveness shall not have
been suspended or terminated at the date of the transfer) and (ii) [insert date
that is two years after issue date of Note], the undersigned confirms that it
has not utilized any general solicitation or general advertising in connection
with the transfer and that this Note is being transferred:


 


[Check One]


 


(1)                                  to the Company or a subsidiary thereof;
or


 


(2)                                  pursuant to and in compliance with Rule
144A under the Securities Act; or


 


(3)                                  to an institutional “accredited investor”
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that
has furnished to the Trustee a signed letter containing certain representations
and agreements (the form of which letter can be obtained from the Trustee); or


 


(4)                                  outside the United States to a person
other than a “U.S. person” in compliance with Rule 904 of Regulation S under
the Securities Act; or


 


(5)                                  pursuant to the exemption from
registration provided by Rule 144 under the Securities Act; or


 


(6)                                  pursuant to an effective registration
statement under the Securities Act.


 


Unless one of the boxes is checked, the Trustee will
refuse to register any of the Notes evidenced by this certificate in the name
of any person other than the registered Holder thereof; provided that if
box (3), (4) or (5) is checked, the Company or the Trustee may require, prior
to registering any such transfer of the Notes, in its sole discretion, such
legal opinions, certifications (including an investment letter in the case of
box (3) or (4)) and other information as the Trustee or the Company has
reasonably requested to


 


10

















 


confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.


 


If none of the foregoing
boxes is checked, the Trustee or Registrar shall not be obligated to register
this Note in the name of any person other than the Holder hereof unless and
until the conditions to any such transfer of registration set forth herein and
in Section 2.15 of the Indenture shall have been satisfied.


 


	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your
  name appears on the

  other side of this Note)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
								



 


TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED


 


The undersigned represents
and warrants that it is purchasing this Note for its own account or an account
with respect to which it exercises sole investment discretion and that it and
any such account is a “qualified institutional buyer” within the meaning of
Rule 144A under the Securities Act and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:  To
  be executed by an executive officer

  
						



 


11

















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to elect to have
this Note purchased by the Company pursuant to Section 4.15 or
Section 4.16 of the Indenture, check the appropriate box:


 


Section 4.15  [        ]


 


Section 4.16  [        ]


 


If you want to elect to have
only part of this Note purchased by the Company pursuant to Section 4.15
or Section 4.16 of the Indenture, state the amount you elect to have
purchased:


 


	
  $

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE:

  	
  The
  signature on this assignment must correspond with the name as it appears upon
  the face of the within Note in every particular without alteration or
  enlargement or any change whatsoever and be guaranteed by the endorser’s bank
  or broker.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee:

  	
   

  	
   

  
							



 


12

















 


EXHIBIT B


 


[FORM OF EXCHANGE NOTE]


 


1

















 


BLUE RIDGE PAPER PRODUCTS INC.


 


91⁄2% SENIOR SECURED NOTE DUE 2008


 


	
  CUSIP No.

  	
   

  	
   

  
	
  No.

  	
   

  	
  $

  



 


Blue
Ridge Paper Products Inc., a Delaware corporation (the “Company,” which
term includes any successor entity), for value received promises to pay to
                                        
or registered assigns the principal sum of
                            
Dollars (or such principal amount as may be set forth in the records of the
Trustee hereinafter referred to in accordance with the Indenture) on
December 15, 2008, and to pay interest thereon as hereinafter set forth.


 


Interest Rate:  9.5%


 


Interest Payment Dates:  Interest will be payable semi-annually in
cash in arrears on June 15 and December 15 of each year, beginning on
June 15, 2004.


 


Record Dates:  June 1 and December 1.


 


Reference is made to the
further provisions of this Note contained on the reverse side of this Note,
which will for all purposes have the same effect as if set forth at this place.


 


IN WITNESS WHEREOF, the
Company has caused this Note to be signed manually or by facsimile by its duly
authorized officer.


 


	
   

  	
  BLUE RIDGE PAPER
  PRODUCTS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  



 


2

















 


TRUSTEE CERTIFICATE OF
AUTHENTICATION


 


This is one of the 91⁄2%
Senior Secured Notes due 2008 referred to in the within-mentioned Indenture.


 


 


	
   

  	
  U.S. Bank National
  Association, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  



 


3

















 


(REVERSE OF SECURITY)


 


91⁄2% Senior Secured Note due 2008


 


1.                                       Interest.  Blue Ridge
Paper Products Inc., a Delaware corporation (the “Company”), promises to
pay interest on the principal amount of this Note at the rate per annum shown
above.  Interest on the Note will accrue
from the most recent date on which interest has been paid or, if no interest
has been paid, from and including the date of issuance.  The Company will pay interest semi-annually
in arrears on each Interest Payment Date, commencing June 15, 2004.  Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.


 


2.                                       Method of Payment. 
The Company shall pay interest on the Notes (except defaulted interest)
to the Persons who are the registered Holders at the close of business on the
Record Date immediately preceding the Interest Payment Date even if the Notes
are cancelled on registration of transfer or registration of exchange after
such Record Date, and on or before such Interest Payment Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments. 
The Company shall pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts (“U.S. Legal Tender”). 
However, the Company may pay principal and interest by check payable in
such U.S. Legal Tender.  The Company may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder’s registered address.


 


3.                                       Paying Agent and Registrar. 
Initially, U.S. Bank National Association (the “Trustee”) will
act as Paying Agent and Registrar.  The
Company may change any Paying Agent, Registrar or co-Registrar without notice to
the Holders.  The Company may act as
Paying Agent or Registrar.


 


4.                                       Indenture.  The Notes
were issued under an Indenture, dated as of December 17, 2003 (the “Indenture”),
among the Company, the Subsidiary Guarantors named therein and the
Trustee.  Capitalized terms herein are
used as defined in the Indenture unless otherwise defined herein.  The  terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
§§ 77aaa-77bbbb) (the “TIA”), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA.  Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of such
terms.  The Notes are senior secured
obligations of the Company and are subject to the provisions of the Intercreditor
Agreement.  Each Holder, by accepting a
Note, agrees to be bound by all of the terms and provisions of the Indenture,
as the same may be amended from time to time.


 


5.                                       Redemption.


 


(c)                                  Optional Redemption on or After
December 15, 2006.  The Notes will be redeemable
at the option of the Company, in whole or in part at any time or from time to
time, on and after December 15, 2006, at the following Redemption Prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on December 15 of the year set forth
below, plus, in each case, accrued and unpaid interest thereon to the
Redemption Date:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2006

  	
   

  	
  104.750

  	
  %

  
	
  2007 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


4

















 


(d)                                 Optional Redemption upon Equity Offerings. 
At any time, or from time to time, prior to December 15, 2005, the
Company may, at its option, use an amount equal to the net cash proceeds of one
or more Equity Offerings to redeem up to 35% of the aggregate principal amount
of the Notes originally issued under the Indenture at a Redemption Price equal
to 109.500% of the principal amount thereof, plus accrued and unpaid interest
to the Redemption Date.  In order to
effect the foregoing redemption with the proceeds of any Equity Offering, at
least 65% of the aggregate principal amount of the Notes originally issued
under the Indenture shall remain outstanding immediately after such Redemption
Date.


 


6.                                       Notice of Redemption. 
Notice of redemption will be mailed by first-class mail at least 30 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder’s registered address.  If fewer
than all of the Notes are to be redeemed, at any time, selection of Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee deems to be fair and appropriate; provided that no partial redemption will
reduce the principal amount of a Note not redeemed to a denomination of less
than $1,000; and provided, further, that any such partial redemption
made with the proceeds of an Equity Offering will be made only on a pro rata
basis or on as nearly a pro rata basis as practicable (subject to the
procedures of the DTC or any other depository) unless such method is otherwise
prohibited.  Notes in denominations of
$1,000 or more may be redeemed in part.


 


Except as set
forth in the Indenture, if monies for the redemption of the Notes called for
redemption shall have been deposited with the Paying Agent for redemption on
such redemption date sufficient to pay such redemption price plus accrued and
unpaid interest, if any, the Notes called for redemption will cease to bear
interest from and after such redemption date, and the only remaining right of
the Holders of such Notes will be to receive payment of the redemption price
plus accrued and unpaid interest, if any, as of the redemption date upon
surrender to the Paying Agent of the Notes redeemed.


 


7.                                       Offers to Purchase. 
Sections 4.15 and 4.16 of the Indenture provide that upon the occurrence
of a Change of Control, after certain Asset Sales and in connection with an
Excess Cash Flow Offer and subject to further limitations contained therein,
the Company will make an offer to purchase certain amounts of the Notes in
accordance with the procedures set forth in the Indenture.


 


8.                                       Denominations; Transfer; Exchange. 
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples thereof. 
A Holder shall register the transfer of or exchange of Notes in
accordance with the Indenture.  The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes, fees or similar
governmental charges payable in connection therewith as permitted by the
Indenture.  The Registrar need not
register the transfer of or exchange of any Notes or portions thereof selected
for redemption.


 


9.                                       Persons Deemed Owners. 
The registered Holder of a Note shall be treated as the owner of it and
the Notes of which it is composed for all purposes.


 


10.                                 Unclaimed Money. 
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee and the Paying Agent may pay the money without interest
thereon back to the Company.  After
that, all liability of the Trustee and such Paying Agent with respect to such
money shall cease.


 


5

















 


11.                                 Discharge Prior to Redemption or Maturity. If the Company at any time deposits
with the Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to
pay the principal of and interest on the Notes to redemption or Maturity and
complies with the other provisions of the Indenture relating thereto, the
Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, except for the rights of Holders to
receive payments in respect of the principal of, and premium, if any, interest
on the Notes when such payments are due from the deposits referred to above.


 


12.                                 Amendment; Supplement; Waiver. 
Subject to certain exceptions, the Indenture, the Notes and the
Guarantee[s] may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing Default or Event of Default or noncompliance with
any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding.  Without consent of any Holder, the parties
thereto may amend or supplement the Indenture, the Notes and the Guarantee[s]
to, among other things, cure any ambiguity, defect or inconsistency, provide
for uncertificated Notes in addition to or in place of certificated Notes,
comply with the TIA, or comply with Article Five of the Indenture or make
any other change that does not adversely affect in any material respect the
rights of any Holder of a Note.


 


13.                                 Restrictive Covenants. 
The Indenture imposes certain limitations on the ability of the Company
and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of their Capital Stock or
certain Indebtedness, enter into transactions with Affiliates, create dividend
or other payment restrictions affecting Subsidiaries, merge or consolidate with
any other Person, sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its assets or adopt a plan of liquidation.  Such limitations are subject to a number of
important qualifications and exceptions. 
The Company must annually report to the Trustee on compliance with such
limitations.


 


14.                                 Successors.  When a
successor assumes, in accordance with the Indenture, all the obligations of its
predecessor under the Notes, the Guarantees and the Indenture, the predecessor
will be released from those obligations.


 


15.                                 Defaults and Remedies. 
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Notes then outstanding
may declare all the Notes to be due and payable in the manner, at the time and
with the effect provided in the Indenture. 
Holders of Notes may not enforce the Indenture except as provided in the
Indenture.  The Trustee is not obligated
to enforce the Indenture or the Notes unless it has received indemnity
satisfactory to it.  The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Notes then outstanding to direct the
Trustee in its exercise of any trust or power. 
The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.


 


16.                                 Trustee Dealings with Company. 
Subject to the terms of the TIA and the Indenture, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Subsidiaries or
their respective Affiliates as if it were not the Trustee.


 


17.                                 No Recourse Against Others. 
No past, present or future stockholder, director, officer, employee or
incorporator, as such, of the Company or the Subsidiary Guarantors shall have
any liability for any obligation of the Company under the Notes, the
Guarantees, the Collateral Agreements or


 


6

















 


the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation.  Each Holder of a Note by accepting a Note waives and releases all
such liability.  The waiver and release
are part of the consideration for the issuance of the Notes.


 


18.                                 Guarantees.                                 Payment of principal and interest
(including interest on overdue principal and overdue interest, if lawful), is
unconditionally guaranteed, jointly and severally, by each of the Subsidiary
Guarantors.


 


19.                                 Intercreditor Agreement. 
Each Holder, by its acceptance of its Note, agrees to be bound by the
terms of the Intercreditor Agreement and any replacement Intercreditor
Agreement and each of the Subsidiary Guarantors and the Holders hereby
authorize the Trustee and the Collateral Agent to bind the Holders to the
extent provided in the Intercreditor Agreement.


 


20.                                 Authentication. 
This Note shall not be valid until the Trustee or Authenticating Agent
manually signs the certificate of authentication on this Note.


 


21.                                 Governing Law. 
The laws of the State of New York shall govern this Note, the
Guarantees, the Collateral Agreements and the Indenture, without regard to
principles of conflict of laws.


 


22.                                 Abbreviations and Defined Terms. 
Customary abbreviations may be used in the name of a Holder of a Note or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).


 


The Company will furnish to
any Holder of a Note upon written request and without charge a copy of the
Indenture.  Requests may be made
to:  Blue Ridge Paper Products Inc., 41
Main Street, Canton, North Carolina 28716, Attn:  Chief Financial Officer.


 


7

















 


FORM OF GUARANTEE


 


The undersigned and its
successors under the Indenture has irrevocably and unconditionally guaranteed,
on a senior secured basis to the extent set forth in the Indenture, dated as of
December 17, 2003, by and among Blue Ridge Paper Products Inc. (the “Company”),
the Subsidiary Guarantors and U.S. Bank National Association as Trustee and
Collateral Agent (the “Indenture”), (i) the due and punctual payment of
the principal of, premium, if any, and interest on the Notes, whether at
maturity, by acceleration or otherwise, the due and punctual payment of
interest on the overdue principal of and interest on the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee all in accordance with the terms set
forth in Article Ten of the Indenture and (ii) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, that
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Capitalized terms used herein have the meanings
assigned to them in the Indenture unless otherwise indicated.


 


THE OBLIGATIONS OF THE
UNDERSIGNED TO HOLDERS OF THE NOTES AND TO THE TRUSTEE PURSUANT TO THIS
NOTATION OF GUARANTEE (THE “GUARANTEE”) AND THE INDENTURE ARE EXPRESSLY SET
FORTH IN ARTICLE TEN OF THE INDENTURE AND REFERENCE IS HEREBY MADE TO THE
INDENTURE FOR THE PRECISE TERMS OF THE GUARANTEE AND ALL OTHER PROVISIONS OF
THE INDENTURE TO WHICH THE GUARANTEE RELATES. 
EACH HOLDER OF A NOTE, BY ACCEPTING THE SAME, (A) AGREES TO AND SHALL BE
BOUND BY SUCH PROVISIONS AND (B) APPOINTS THE TRUSTEE ATTORNEY-IN-FACT FOR SUCH
HOLDER FOR SUCH PURPOSES.


 


This Guarantee shall be
governed by and construed in accordance with the laws of the State of New York.


 


	
   

  	
  [NAME OF SUBSIDIARY
  GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


8

















 


ASSIGNMENT FORM


 


If you the Holder want to
assign this Note, fill in the form below and have your signature guaranteed:


 


I or we assign and transfer this Note to:


 


 


(Print or type name, address and zip code and

social security or tax ID number of assignee)


 


and irrevocably
appoint                                                                                              
agent to transfer this Note on the books of the Company.  The agent may substitute another to act for
him.


 


	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your
  name appears on the

  other side of this Note)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
								



 


9

















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to elect to have
this Note purchased by the Company pursuant to Section 4.15 or
Section 4.16 of the Indenture, check the appropriate box:


 


Section 4.15  [         ]


 


Section 4.16  [         ]


 


If you want to elect to have
only part of this Note purchased by the Company pursuant to Section 4.15
or Section 4.16 of the Indenture, state the amount you elect to have
purchased:


 


	
  $

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE:

  	
  The
  signature on this assignment must correspond with the name as it appears upon
  the face of the within Note in every particular without alteration or
  enlargement or any change whatsoever and be guaranteed by the endorser’s bank
  or broker.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee:

  	
   

  	
   

  
								



 


10

















 


EXHIBIT C


 


FORM OF LEGEND FOR GLOBAL NOTES


 


Any Global Note
authenticated and delivered hereunder shall bear a legend (which would be in
addition to any other legends required in the case of a Restricted Security) in
substantially the following form:


 


[If a Regulation S Temporary
Global Note, insert: THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATES
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).  NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS
OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT
OF INTEREST HEREON.]


 


THIS NOTE IS A GLOBAL NOTE
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR
DEPOSITORY.  THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.


 


UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.


 


1

















 


EXHIBIT D


 


Form of Certificate To Be


Delivered in Connection with


Transfers to Non-QIB Accredited Investors


 


	
                       ,       

  



 


U.S. Bank National Association


60 Livingston Avenue


St. Paul, MN  55107


 


Re:                               91⁄2% Senior
Secured Notes due 2008 (the “Notes”) of Blue Ridge Paper Products Inc. (the
“Company”)


 


Ladies and Gentlemen:


 


In connection with our
proposed purchase of
$                           
aggregate principal amount of the Notes, we confirm that:


 


1.                                       We have received a copy of the Offering
Circular (the “Offering Circular”), dated
[                ],
relating to the Notes and such other information as we deem necessary in order
to make our investment decision.  We
acknowledge that we have read and agreed to the matters stated in the section entitled
“Notice to Investors” of the Offering Circular.


 


2.                                       We understand that any subsequent
transfer of the Notes is subject to certain restrictions and conditions set
forth in the Indenture dated as of December 17, 2003 relating to the Notes
(the “Indenture”) and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the “Securities
Act”).


 


3.                                       We understand that the offer and sale of
the Notes have not been registered under the Securities Act, and that the Notes
may not be offered or sold except as permitted in the following sentence.  We agree, on our own behalf and on behalf of
any accounts for which we are acting as hereinafter stated, that if we should
sell or otherwise transfer any Notes prior to the date which is within two
years after the original issuance of the Notes or the last date on which the
Note is owned by the Company or any affiliate of the Company, we will do so
only (i) to the Company or any of its subsidiaries, (ii) inside the
United States in accordance with Rule 144A under the Securities Act to a
“qualified institutional buyer” (as defined in Rule 144A under the Securities
Act), (iii) inside the United States to an institutional “accredited
investor” (as defined below) provided that, prior to such transfer, the
transferee furnishes (or has furnished on its behalf by a U.S. broker-dealer)
to you a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Notes, substantially in the
form of this letter, (iv) outside the United States in accordance with
Rule 904 of Regulation S under the Securities Act, (v) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available) or (vi) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person purchasing
any of the Notes from us a notice advising such purchaser that resales of the
Notes are restricted as stated herein.


 


1

















 


4.                                       We are not acquiring the Notes for or on
behalf of, and will not transfer the Notes to, any pension or welfare plan (as
defined in Section 3 of the Employee Retirement Income Security Act of
1974, as amended), except as permitted in the section entitled “Notice to
Investors” of the Offering Circular.


 


5.                                       We understand that, on any proposed
resale of any Notes, we will be required to furnish to you and the Company such
certification, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions.  We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.


 


6.                                       We are an institutional “accredited
investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our investment
in the Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.


 


7.                                       We are acquiring the Notes purchased by
us for our own account or for one or more accounts (each of which is an
institutional “accredited investor”) as to each of which we exercise sole
investment discretion.


 


8.                                       We are not acquiring Notes with a view to
any distribution thereof in a transaction that would violate the Securities Act
or the securities laws of any state of the United States or any other
applicable jurisdiction; provided that the disposition of our property and the
property of any accounts for which we are acting as fiduciary shall remain at
all times within our and their control.


 


You and the Company are
entitled to rely upon this letter and are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered
hereby, and we agree to notify you promptly if any of our representations or
warranties herein cease to be accurate and complete.


 


This letter shall be
governed by, and construed in accordance with, the laws of the State of New
York without regard to principles of conflicts of laws.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  	
   

  



 


2

















 


EXHIBIT E


 


Form of Certificate To Be


Delivered in Connection with


Transfers Pursuant to Regulation S


 


U.S. Bank National Association


60 Livingston Avenue


St. Paul, MN  55107


 


Re:                               91⁄2% Senior
Secured Notes due 2008 (the “Notes”) of Blue Ridge Paper Products Inc. (the
“Company”)


 


Ladies and Gentlemen:


 


In connection with our
proposed sale of
$                              
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, we represent that:


 


1.                                       the offer of the Notes was not made to a
person in the United States;


 


2.                                       either (a) at the time the buy offer was
originated, the transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor any
person acting on our behalf knows that the transaction has been pre-arranged
with a buyer in the United States;


 


3.                                       no directed selling efforts have been
made in the United States in contravention of the requirements of Rule 903(b)
or Rule 904(b) of Regulation S, as applicable;


 


4.                                       the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act; and


 


5.                                       we have advised the transferee of the
transfer restrictions applicable to the Notes.


 


You and the Company are entitled
to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.  Terms used in this certificate have the
meanings set forth in Regulation S.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signature